DOMINION BUTTER

New Zealand Herald, Volume LXXIV, Issue 22743, 1 June 1937, Page 10

DOMINION BUTTER

LONDON PRICE TRENDS NEARER THE DANISH LEVEL EFFECT OF MARKETING PLAN [)IV TET.KGItAPn —IMIKSS ASSOCIATION*] CIIIMSTCIIUrU'H, Monday Recent price trends on the London dairy market have shown one outstanding feature of great interest to the Dominion, a gradual reduction and ultimately a temporary elimination of the margin of Danish butter prices over New Zealand. This is claimed by Dominion marketing authorities as partial justification at least for the new methods adopted in handling deliveries of butter on to the British markets and an answer to criticism made earlier in the year that the new policy was antagonising trade and reacting unfavourably on the market. "We cannot claim that the reduction of the margin is entirely due to our policy," said the acting-Director of Marketing, Mr. G. A. Duncan, when commenting on the position in a telephone interview with the Christchurch Press to-day, "but it is only fair to say that both, the general trend of prices and the narrowing of the margin are an indication that there cannot be much wrong with our marketing policy. It must surely be a fair indication that there cannot bo marked Hostility to or boycotting of our butter, as was suggested in February when the price happened to be low. Regulating Supplies "It is the desire of the department with the new system to ensure that supplies should come on to the market as regularly as possible, extended over as long a period of the year as is feasible," Mr. Duncan said. "Jn the past the buyer could not be sure that he would get certain quantities at stipulated periods, because factories hero sold outright and altered the destination of butter altogether. This new system has been made possible, of course, by the guaranteed price plan of the Government. There has been some criticism that the scheme entailed holding the butter in store for too long a period. Actually there has not been much delay in this respect. What has occurred has arisen from the desire to spread shipments more evenly. The scheme will have a tendency to reduce the former wide fluctuations in price and has eliminated speculative f.o.b. buying, which so often left agents and customers high and dry. and probably accounted for a loss of custom as well. That is why our plan is quite attractive to the agents at Home." Mr. Duncan mentioned another improvement which, he said, the guaranteed price plan had brought about on the market. Butter now being sold "as markedly improved in quality. The system of payment adopted giving quality premiums on grade points had definitely led to an increase in high scoring butter and cheese. Gradual Narrowing While butter prices this year have followed broadly the same trends as last year, there has in recent months been a gradual narrowing of the margin between Danish and New Zealand, which ended in the middle of last month with the two prices equal and the margin temporarily non-existent. The margin in favour of Danish dropped from 22s per cwt. in February, 19.'3fi. to 8s per cwt. in May of the same year, but this year the decrease was from .'lss per cwt. in February to the stage where New Zealand equalled Danish at 108s per cwt. This development is claimed to be partly caused by the change from outright selling on f.o.b terms to the system of shipment and marketing adopted under the general guaranteed price plan, ensuring the regular arrival of butter and cheese of uniformly high quality at main distributing ports in the United Kingdom in quantities regulated to meet market requirements. The most recent returns from London indicate that some margin has again been established, but it is still well below the narrowest 1906 margin; in fact, the figures on May 22 showed a margin in favour of New Zealand.