THE BUTTER MARKET

Otago Daily Times, Issue 18448, 9 January 1922, Page 6

THE BUTTER MARKET

ACCUMULATION OF GOVERNMENT STOCKS. EFFECT ON COMING SEASON. (Feom Oxm Own Correspondent.) LONDON, November 18. A rather peculiar position baa arisen with regard to the butter market in this country, which naturally will have an/effect on the producers in Australia and New Zeeland. It is common knowledge that the Government still have in store about on© million Jcwt case© of butter. Most of this consists of Australian bought at the high price under control a year ago, and tho accumulation is bound to have a drag on the market during the coming Australasian season. Tho Goveriiment have no desire to hold this great amount of stock, for storage charges are amounting ■ up, and tho butter is gradually deteriorating. Once a fortnight the Government authorities fix, their prices, which, compared to tho price they paid for the produce, are exceedingly generous, but while there is fresh butter buyers have no great desire to handle the Government stocks.

Tho present official quotations are: Firstgrade New Zealand, 192 s per owt; first-grade Australian, 1655; second-grade Australian, 150 s; third-grade (Australian, 1355; Argentine, 125 ato 160 s per cwt. Just at the present time there is a scarcity of butter, and probably the Government are profiting by /the fact, but as soon as the Australian and New Zeeland now shipments become more frequent the accumulated stock is likely to be neglected if prices are kept up to a reasonable standard. i

On the other hand, if the Government decides to bring their prices down to_ a very low figure to clear their stocks, it is going to have the effect of bringing down prices for the free article as welL One shipment of Australian butter has arrived, and as much ns 178 s has been paid for it. ! This, as compared with the 165 s asked 1 for the controlled article, gives some indication as to wbai extra money buyers are prepared to pay for the new season's goods. _ If the Government decides to push their sales at all costs, the prices for the new shipments must come down as welb for though ouyers are prepared to pay a higher figure for fresh butter, the quality of the stored article is not so inferior that they can afford to ignore a tempting offer. No blame can be attached to the Government unless it be that they were W generous. When they contracted for the whole of the Australasian output last year at the exceedingly high price aeked, they paid that price, frankly admitting that they had had the best of the deal during the war. However, as the result of a good season and the high price, both countries practically doubled their output, and the Government had to nay for a greet deal more butter than they wanted. The loss, of,course, has been very ereat, and it is unfortunate that the enormous etock has not yet been disposed of, and will have a dragging effect on the coming season. It can only be looked upon as the natural workings of an economic law ,■ and bears out the truth of the old adage, xcu can’t have your cake and eat it.