DAIRY PRODUCE MARKET.

Putaruru Press, Volume V, Issue 177, 24 March 1927, Page 8

DAIRY PRODUCE MARKET.

THE GLOOMY OUTLOOK,

Morrinsville Opinions. The present serious outlook of the dairy produce market in England is giving rise to considerable uneasiness among the farming community and in the Dominion generally, the only bright lining at present appearing to be the good prices, obtained for wool and the upward tendency of the beef market. The reduction of butter prices to 146 s and 14Ss per. cwt announced yesterday has tended to increase the misgivings held by the farmer as to the. immediate future. Interesting comment on the present position was made to a Morrinsville Star reporter on Thursday afternoon by the chairmen of directors of the three co-operative dairy companies in the Morrinsville district. AN IMPROVEMENT IN SIGHT. “ I am an optimist by nature hut in this case a pessimist by compulsion,” remarked Mr. W. Darrall, chairman of directors of the Tatua Co-op. Dairy Co., when viewing rather dubiously the prospects of the next few months. He was of the opinion that the present season would be a difficult one for the farmer but believed that by next season the market would be a great deal more favourable, i Mr. Darrall said he sympathised j with the opinion expressed that price- I fixing would be successful if the proj ducers could afford to wait till the j other man was forced to buy, but it j I was an unwise move, in the light of , past experience, to fix prices, as the ' , New Zealand producers were not yet ' strong enough to combat the London | merchants, whom it was most unwise jto antagonise. The Dairy Produce ' Control Board had evidently lost the goodwill of the London merchants, i who appeared to prefer to buy other 1 produce, and the accumulation of stocks at the beginning of this sea--1 son no doubt helped the merchants j in leaving New Zealand’s butter and cheese alone. There was still ample scope for the Control Board’s activities, thought Mr. Darrall, in the regulation of shipping supplies to the market and attending to storage facilities when storing was necessary. He was not prepared to venture an opim on as to how the present posit:'''--, v/vuld develop, hut his advico „o the farmers was that they should be careful of their expenditure. The Tatua Company’s payment for last month’s supplies had been fixed at Is per pound butterfat and he did not think that the suppliers could look for a much better payment this season. He considered it unwise to make the advances too high. Although he was pessimistic . about the near future he did not think it would be very long before the market would right itself.

With regard to the board’s policy of clearing the stocks, Mr. Darrall said the economic position must he very bad in England if the stocks could not be disposed of at the present prices. A lot depended upon the attittftle of the London merchants and if they fulfilled their promise of co-operation the future might be a little more rosy, but if not the outlook would be distinctly bad. OPPONENTS’ ANTICIPATIONS. Mr. J. E. Leeson, chairman of directors of .the Morriqsville Company, said , the present position had been anticipated by the opponents, to control. He added that the. attempt on the part of the New Zealand Dairy Produce Control Board to handle 25 per cent, of the butter imported into England and ‘ to impose all sorts of restrictions and conditions upon the sale of that 25 , per cent. < while 75 per cent, of Britain’s butter supply is poured into the country without the slightest restriction as to price and, conditions of sale had resulted in what would probably be one of the worst, slumps- the market—for New Zealand produce had faced. % “The promises of the bontrol Board that absolute control would result in our receiving the sanie price as that received by Denmark, jelimination of speculation and the! entire abolition of slumps have certainly not eventuated,” he went on.* “ The placing on the market of* 90,000 boxes or what is practically half the total English consumption of. butter per week, with forced sales for the next 15 weeks, I a’m afraid will result in considerably reduced prices and one of the worst slumps we have ever experienced. For the fortnight ending February 22 the sales by the Control Board amounted to 46,000 boxes, and now they propose to put

90,000 boxes, double that quantity, on the market .in one week and have it sold at whatever price is offered. “ I consider the abolition of f.o.b. sales *in New Zealand has been a j great mistake. The merchants who 1 had been previously in the habit of ( buying large quantities of New Zealand butter f.o.b. New Zealand have ( turned their attention to other countries where they were welcomed and able to buy without restriction, and 3 I think that it would help to reduce the' enormous output of this season < were those sales restored forthwith. “ It seems very unlikely,” Mr. Leeson went on, “that suppliers will receive their usual winter bonus, and it behoyes everyone - to husband .their financial resources. “I do not' expect the Government to make' any move. They will tell us that' they are not responsible, and the board’s policy must be altered by the wish of the electors of the board at the next election in June, when three wards will be contested, the three, retiring members being Mr. Goodfellow, Mr. Thacker and Mr. Forsythe. LATEST MOVE A MISTAKE. In the opinion of Mr. S. A. Ferguson, chairman of the Norfolk directors, the position prior to the Control Board’s last eventful meeting was not as bad as was represented. The accumulations of stocks were : no larger than at least this time last | season. At this time of the year, I when the flush of the produce, was | coming on the market, it appeared j usual for the prices to decline. The effect of this was not noticed so I much in the past as it was on this occasion, as, until this season the I produce was sold on arrival to the j merchants, though perhaps it was not actually sold for consumption. The Control Board had everything against it from the start, there being large accumulations of stocks, due mainly to the coal strike reducing the purchasing power of the people and with more demand for the inferior qualities than for the better brands. The demand for Danish butter was more steady, owing possibly to the fact that it would be bought by the upper classes, who would not be affected by the stress of circumstances. It was Mr. Ferguson’s opinion that New Zealand was only now feeling the full effect of the coal strike. Speaking with regard to future possibilities, Mr. Ferguson thought the prices would tend to decline as a result of the decision to clear the accumulated stocks without pricefixing. Had the policy of pricefixing been adhered to, and an endeavour made to sell a specified quantity each week, the position, in his opinion, would have been more favourable and would have tended to steady the market. Offering the produce in large quantities without knowing what price it would bring would possibly have the effect of bringing the prices down, but on the I other hand it might be the means of stimulating competition. A lot of propaganda through the press, he said, had been engineered to upset the Control Board. In doing this the opponents of control had taken advantage of the decreased spending power of the consumers and led the producers to believe that their produce was being boycotted. Had the farmers not become panicy, and stood behind the Control Board, giving it, at least a season’s full trial, the ultimate result might have been satisfactory. Owing to differ- ■ ences of opinion on the board and the , opponents taking advantage of this i and of other circumstances the board - had not had a chance to makq, good. l He said that the Norfolk Company r was paying out Is Oid this month. ) ! MR. J. CLARK’S OPINION. ► " j. DENMARK AND CONTROL. * 1 I B j “I would be very sorry to meet * the gentleman who can be chuckling over what is called a defeat,” re--1 marked Mr. J. Clark, ex-director of 1 the New Zealand Co-operative Dairy s Company, when speaking at a social - function at Tauhei on Friday evening e and referring to the present crisis in f connection with New Zealand’s dairy e produce market. 3 Mr. Clark said Denmark exercised a system of price-fixing in connection with that country’s butter. When he was on a visit to England 40 years s ago he discovered that the Danes fixed the price of their butter j. and satis were not entertained e under that price. This was virtually 0 a system of control, yet no objection t was raised to it.