DAIRY PRODUCE

Southland Times, Issue 20014, 30 October 1926, Page 7

DAIRY PRODUCE

STORED BUTTER A STATEMENT DENIED POLICY OP BOARD OUTLINED Contradiction of the reported representations of trade interests to Mr Coates, to the effect that the Dairy Board, by storing and price-fixing, was responsible for the present butter slump, was made by Mr J. R. Thacker, acting-chairman of the New Zealand Dairy Produce Board to the Wellington correspondent of the Lyttelton Times during the week. A Press message from London, published a few days ago, stated that: “Mr Coates privately received a deputation representing all sections of the butter trade of Britain, who strongly represented that the Dairy Board’s policy of holding from the market large stocks in cold storage had had a most disastrous effect in causing a drop in values, and emphasised that the board’s proposed further step of price-fixing would be most detrimental, both to the New Zealand producer and to the trade

at this end.” In reply, Mr Thacker stated that he had noted a determined effort was being made in certain quarters to create a prejudice against the Dairy Board by similar misstatements of fact. On behalf of the board, he wished to place on record a denial of the statements as reported, and the implications arising from them. “At the time the trade deputation was made not one single box of butter was held in store in Britain by the board,** said Mr Thacker. “The Rotorua, which arrived on October 17, carried 36,131 boxes of butter free of control, and 3994 crates of cheese, of which only 2779 crates were under the board’s administration. The first parcel of the board’s butter was only 100 boxes, ex Norfolk, due on October 26, to be followed by the Corinthic on November 1 with a total of 67,273 boxes of butter and 3675 crates of cheese. It is absolutely incorrect and untrue to charge the board with storage and responsibility for the present market position. Similar slumps have occurred at certain stages in each of the past five seasons, independent of storage conditions, and due to unregulated heavy arrivals of Antipodean produce. These past slumps have been accentuated by the practice of buyers, as stated by the Imperial Economic Committee, of holding off the market at certain periods of heavy arrivals, and so sending the market down to a level lower than was justified. At the same time, retail prices have been held at an unduly high level in comparison, with wholesale prices, thus preventing consumers from increasing consumption at periods of maximum supply and giving the producers an increased outlet with quicker price recovery. The board’s policy in relation to price is, and always has been, that there shall be a fluid adjustment to the economic price level from day to day, on a basis which will encourage the maximum consumption without sacrifice of the producer’s interests, as they have been sacrificed by the fact of annual slumps for the past five years. Storage of produce, followed on periods of heavy supply and low prices, h>as been a recognised and necessary trade practice, pending the consumption of produce, and is so admitted by the Imperial Economic Cbnunittee in its report. Such storage, when privately practised by the trade, has not hitherto evoked comment. According to the Imperial Economic Committee, the equivalent of 1,600,(MX) boxes, which reached Britain in the first half of 1925, was oversupply for the consumption in that period, and was necessarily stored by the trade for consumption in the second half of the year, without slump reactions on that occasion. Fixed storage is not approved by the board, whose policy will be to maintain consumption in order of manufacture, and so avoid any possibility of unnecessary accumulations. As the difficulties of the present situation are increased by lack of accurate knowledge of the stocks concerned, and as the board has strong reason to believe that certain estimates, which have been published, are exaggerations of the facts, I, on behalf of the board, strongly endorse the recommendations of the Imperial Economic Committee, that official statistics of the amounts of produce in store in Britain should be regularly published. Members of the board def>lore the attempts to create consumer prejudice against New Zealand produce by misrepresentation or inadequate statements. The New Zealand iiroduccr desires the goodwill of the British consumer and will do nothing to forfeit it. The course of the market in the. past is admitted by the Imj>eriaJ Economic Committee to have been at times prejudicial to both British consumer and New Zealand iiroducer. The more orderly marketing of New Zealand's production, aimed at by the board, seeks to avoid those excessive price fluctuations which, while not adequately benefiting the British consumer, have seriously limited the producer’s returns and affected his ability to buj 7 British goods. The existing and past disparities between foreign and Empire butter are not regarded as economically fair or justifiable. Lf the mind pf the British consumer is not poisoned pending the plans of the Dairy Board being given an adequate trial there will be no cause for complaint.” PRICE FIXATION. OPPOSITION IN LONDON. (Rec. 7.5 pjnJ London, October 28. Press cablegrams state that the New Zealand Dairy Control Board is inviting three English importers to assist m the fixation of prices for butter. The Australian Press Association understands that opinion among a large majority of all sections of the trade is strongly opposed to fixation, and if the board adheres to the policy traders will probably take other butters in prciference to New Zealand. —A. & N.Z.