BUTTER QUOTA PLAN

Poverty Bay Herald, Volume LX, Issue 18065, 17 April 1933, Page 2

BUTTER QUOTA PLAN

ONLY TEMPORARY BENEFIT RISE, THEN FURTHER FALL STOCKS lIEILD NOT EXCESSIVE Only a temporary benefit is expected from the butter quota proposals, which would not solve the present market problems, according to an opinion expressed by Joseph Nathan and Company in tho firm’s monthly circular, which states:— “The increasing supplies of butter received on the English market from practically all producing countries have depressed the market beyond any figure ever thought of by the industry. It was generally believed that no great improvement was likely whilst production was continuing to show such increases ; but no one was of the opinion that we should see butter quoted at 65s per owt., as happened a few days ago. Since then there lias been a slight improvement, but (whether it will be maintained is another question. “The plight of the dairy farmer is desperate; and a- continuance of these low prices will ho calamitous. Meanwhile, we are searching round for some means of bringing the market up to a figure more in keeping with the cost of production; and it was inevitable that the quota system should come into the limelight. There is much to be said both for and against this system; and while we believe that those advocating a voluntary restriction of shipments have the interests of the industry at heart, we are of tho opinion that this action would not solve the difficulty. / “If restriction wore made, it is likely that buyers would immediately commence to cover their requirements, with a resultant rise in rates, but when this trading ceased there would be the usual stagnation, and prices would slip back, perhaps even lower than they are at present. Apart from this, we should still have a carry-over in New Zealand (involving additional storage and interest charges) which would then meet the full competition ol' the Northern Hemisphere season. “As yon are probably aware, a feature of the Danish marketing policy is to meet the market at all times and clear their supplies each week at best possible prices. In any case, it is doubtful if the immediate introduction of the quota system, even supposing it does what its advocates expect, would be of much benefit insofar as the present season’s output is concerned. Consumption’ in England has kept up wonderfully well considering the troublous times the Mother Country is experiencing. Nevertheless, stocks at present are a little higher than they were at the same time last year ; but even so they should not be considered excessive, and do not warrant (lie present range of values. “Latest reports from England advise that the selling of Danish butter in pat form is now well under way. This is a question that should receive the earnest consideration of all factory directors at their next disposal meeting. Contrary to tho expressed views of opponents to patting, this Danish venture has not affected New Zealand pat sales in any way, but rather has tended to increase them. The solution of this apparent paradox is simple. “Previously, all shops had an established sale of Danish from the cask, and buyers would not bother to push other butters which were hard to sell. However, with tho advent of Danish in pat form, shopkeepers found it easy also to offer and sell to the consumer other butters in pats side by side. “It has long been realised that the present generally accepted methods of marketing of New Zealand butter and cheese are not conducive to the producer's obtaining tho maximum result of his labors; and wo are still confident that the salvation of the industry lies in the development of the pat trade.

“Offers. —There was a little forward business recently, and up to 9jd was taken. Apparently these purchases were of the speculative type, probably in anticipation of an early imposition of the quota. With the question still in doubt, all buyers have evidently withdrawn from the market.”