AUSTRALIAN BUTTER

Southland Times, Issue 20495, 25 May 1928, Page 2

AUSTRALIAN BUTTER

HOLDING FOR A RISE. One of the most important matters dealt with at a recent meeting of the Butter Stabilization Committee in Sydney related to the price of butter after 15th June, when the increased duty of 6d. a lb will come into force in Australia. It was evident from the growth of stored stocks in New South Wales, and to a far smaller extent in Victoria, that a large quantity of butter was being built up with a view to making substantial profits when the revised duty comes into operation. In New South Wales alone cold store supplies amount to about 3,500, 000 tons, and in Victoria the amount is about 750 tons. Some business was done in New Zealand butter also for the purpose of profit-making after the middle of June.* It was obvious that such an accumulation would be detrimental to the interests of dairy farmers in the coming winter, as their fresh production would have to compete with these heavy stored stocks. The main question which the stabilization committee had to deal with, therefore, was whether it would be advisable to raise prices of butter immediately the impost of 6d. a lb becomes effective. It is learned that the committee considered that an increase in prices on 15 June would be inadvisable, and it was decided by representatives of the various States that no action in this respect should be taken until a reasonable absorption of the stored stocks has taken place. Apparently the idea is to export fresh butter made after 15th June, for which the producers may, perhaps, be recompensed subsequently by a retrospective adjustment of the Paterson bounty. This would allow the stored butter to be consumed freely. As the revised duty of 6d a lb on butter will come into operation at the middle of next month, New Zealand exporters have been anxious to place a large quantity of butter on the Australian markets. To some extent they have been successful, as speculators, expecting that an advance of 2d. a lb will be made in the price of butter when the new duty becomes effective, have regarded purchases as a sure means of reaping a handsome profit. But the decision of the stablization committee has put a complexion on the situation different from what those interested in stored stocks and New Zealand butter desired. Prices will not be affected by the higher duties which will come into force next month until the stocks are reduced to small proportions. It would be very profitable to butter fact ory representatives in New South Wales if the price of butter were raised 2d a lb immediately after 15th June. Not only would they gain considerably from the sale of this butter in the Commonwealth market, but they would also collect a bounty of 5d a lb on butter made after that date. The butter now stored would not, in any case, participate in the increased bounty, but it will be sold in the Australian markets.