DAIRY SURPLUS

New Zealand Herald, Volume LXXV, Issue 23047, 26 May 1938, Page 14

DAIRY SURPLUS

CREDIT IN ACCOUNT £2,500,000 POSSIBLE ■BUTTER MARKET FUTURE OPINIONS IN INDUSTRY While dairying authorities are loth to base estimates on future market conditions which have proved their instability in past years, there is a fairly general opinion that at the close of the season the Dairy Industry Account will contain a surplus of from £2,500,000 to £3.000,000. On the basis of the more conservative assumptions, it was calculated yesterday that the butter section might bo in credit to the extent of £1,800,000 sterling and that tho corresponding figure for cheese would be,, perhaps, £310,000 sterling, making an aggregate in New Zealand currency of over £2,500,000. In som6 quarters it is considered that fullj' half of tho Dominion's butter production has yet to be sold and, with the total quantity assessed at between 140,000 and 160,000 tons of produce, it was stated that about 70,000 tons would be disposed of on what should prove a Steadily rising market. It was explained in support of these figures that on April 30 three months' butter was in store in the Dominion. Price Predictions

However, the opinion was expressed by another authority that about half of the season's output had been sold

and he mentioned that reliable overseas estimates suggested that 60,000 '"• tons remained. It was expected that the market would reach a peak of about 140s in August and the average price forecast for unsold stocks of butter from the middle of May was 1355. Ihis would yield a surplus of £1,380,000 sterling" over the guaranteed price and to this £550,000, in New Zealand currency, was to be added. > Up to the middle of this month, the profit realised by the Marketing Department on cheese has been estimated at £58,000. On a basis of 72s 6d a cwt. it is considered that unsold produce will realise a credit of over £252,000, making a total profit or £310,000 sterling. A Warning Note It was pointed out that any estimate based on market predictions should not cause farmers to be over sanguine, as price fluctuations in June, July, August and September, while expected to be favourable, could not be determined with accuracy. It was recalled that, following early forecasts of a large deficit in the account last year, the market in the latter portion of the season rose beyond expectations.