DAIRY PRODUCE MARKETING

Southland Times, Issue 23897, 16 August 1939, Page 15

DAIRY PRODUCE MARKETING

Success Of Policy Claimed SINGLE-UNIT SYSTEM HIGHER STOCKS AT END OF SEASON (From Our Parliamentary Reporter) WELLINGTON, August 14. “It is pleasing to record that the success of the policy adopted in the marketing of butter and cheese, which was clearly indicated in the first year after the inauguration of the new procedure, has been fully maintained,” stated the annual report of the Primary Products Marketing Department to the House of Representatives. Merch-ant-agents, dairy industry officials and others qualified to judge are in-general agreement as to the soundness of the single-unit system of marketing, with general sales instead of sales by individual dairy factory companies, and with consignment selling in place of the mixed consignment and f.o.b. and c.i.f. selling, which was a disturbing feature in the marketing system of the past. The distribution of butter and cheese in the United Kingdom has been widened by means of a better direct shipment service to the main ports. The new marketing procedure has resulted in savings in costs of marketing amounting to approximately £200,000 a year.” The payment of guaranteed prices for butter and cheese had given dairy farmers stability and security by protecting them from the effects of fluctuations in market prices for dairy produce, stated the report. The fixed and uniform monthly rate of payment for butterfat that dairy factory companies had been able to maintain enabled dairy farmers to budget with certainty for their farming and domestic expenditure. The guaranteed-price policy had worked smoothly, and the administrative procedure had been conducted without a hitch.

At the beginning of October 1937, stocks of butter in cold store, according to the Imperial Economic Committee’s return, were over 10,000 tons less than in 1936, the total being the lowest for the eight years during which coldstore statistics had been published. Imports in September had been unexpectedly light—some 11,000 tons less than in the previous September—and October and November imports were also well below those of the same months of 1936. This shortage of supplies resulted in a very sharp rise in the price of all butter in October, the range of prices being from 127/- to 151/- a hundredweight. The consequent high retail price (1/6 a pound) severely checked consumption, which, up to that time, had been maintained at a satisfactorily high level. It was reliably estimated that weekly consumption fell by at least 1000 tons a week during November. I FALL IN PRICE Stocks at the beginning of the Janu-ary-March 1938 quarter, though showing some recovery from the very low level reached in December, were still much less than normal, but arrivals from the latter part of December onwards, particularly of New Zealand and Australian butter, were well above consumption. In consequence, the price of New Zealand fell almost continuously from 151/- a hundredweight at the end of October 1937 to 106/- a hundredweight at the end of January 1938, the average retail price falling at the same time from 1/6 to 1/2 a pound. Consumption responded to some extent to the lower retail prices, but remained well below the level of the previous year. In early February, market sentiment became more favourable, due in a large measure to the substantial reduction in New Zealand gradings, the persistent reports of the widespread incidence of foot-and-mouth disease in France, Belgium, Holland and Germany and to the abnormally dry weather in Great Britain, Denmark and certain areas of Northern Europe. Notwithstanding these factors, however, imports were maintained at a higher level than in 1937, but the possibility of short supplies during the summer period created a good “stocking-up” movement, which enabled sellers to advance prices steadily during February-March.

“At the beginning of April total stocks had increased to nearly 15,000 tons, only about 2000 tons less than at the same date in 1937,” stated the report. “The continued decline in New Zealand production, however, and abnormally dry weather in the European countries referred to above, brought about a further increase in demand with a rising price movement, culminating in mid-May, when New Zealand, Australian, and Danish butter reached 133/-, 131/- and 132/- a hundredweight respectively. Retail prices for New Zealand advanced in sympathy from 1/2 to 1/4 a pound, checking the seasonal increase in consumption, which invariably occurs in the summer months.

“In May the long spell of dry weather was broken by ample rains and it became evident that northern hemisphere production would be maintained at a high level during the season. Prices receded by from 10/-to 12/-a hundredweight for all descriptions during the second half of May, and remained till the end of the season at around 120/to 125/- a hundredweight for New Zealand, with Danish at about the same price to 4/- premium until mid-August when the seasonal decrease in Danish production brought about the usual sharp rise in the price of Danish. The season will close in September with total stocks from 12,000 tons to 14,000 tons higher than at the same date in 1937, and also in excess of that of the two previous years.” MONTHLY PRICES The average monthly prices of butter at London were as follows:—

“The balance of the 1936-37 seasons output of cheese cleared well during October-November last at from 70/- to 74/- a hundredweight,” stated the report. “The new season’s make arriving for the mid-winter trade, when cheese consumption is at its lowest, caused the usual price recession, which, however, was not so marked as in recent years. The lowest price of the season for New Zealand cheese was reached at the end of December, when the week’s sales averaged 64/- a hundredweight. A moderate recovery followed, and prices remained steady during January and February at an average of 68/- a hundredweight. From March onwards a gradual upward movement carried prices to 73/- a hundredweight at the end of August.” The following table of average monthly prices of cheese at London shows, for New Zealand and Canadian cheese, the movement in price during the season just closed compared with the previous season:—

SUPERVISION OF HANDLING “In the report for the 1936-37 season an outline was given of the measures adopted by the department’s inspectors to safeguard the quality of butter and cheese,” stated the report. “The department has three officers in New Zealand and one in London engaged on this work. These officers collaborate with officers of the Dairy Division of the Department of Agriculture in New Zealand and London in the care of produce in cool stores. The officers of the department exercise supervision and inspection of the methods of handling, transport, and storage of dairy produce in transit from the dairy factories and during loading into overseas vessels. There is thus complete supervision at all stages from factory in New Zealand to cool stores in the United Kingdom. During the 1937-38 season this work has been fully maintained. All overseas vessels’ refrigerated spaces for carriage of dairy produce have been inspected, and conditions of transport and handling at main ports and outports have been reported on. When necessary, the attention of the representatives of the shipping companies has been drawn to any unsatisfactory conditions found in ships’ refrigerated spaces, and in all cases the requirements of the department’s inspectors have been met. Thu system of supervision and inspection of shipping, transport, ana storage of dairy produce is a factor in the determination of the basis of the contract for insurance and of the insurance rates charged. The excellence of the results achieved is reflected in reduced insurance rates, and is further shown by the provision in the insurance contract that the system of supervision and inspection be continued.”

New Zealand. Finest Salted. 193G-37. Per Cwt. 1937-38 Per Cwt Month s d s d August 119 6 116 6 September 107 9 117 6 October 99 9 137 0 November 109 0 131 6 December 100 6 113 3 January 94 6 110 3 February 86 6 112 3 March 9G 3 117 0 April 105 0 124 3 May 107 0 129 6 June 110 0 122 2 July 114 0 121 6 AVERAGE 104 2 121 1

New Zealand (Finest White). 1936-37 1937-38 Per Cwt. Canadian (Finest White)* 1936-37 1937-38 Per. Cwt. Month s d s d s d s d August 68 9 70 3 68 9 71 3 September 68 9 68 6 71 3 70 3 October 70 0 71 0 70 3 71 6 November 72 3 71 9 73 3 73 6 December 62 9 66 0 71 9 73 6 January 55 6 67 9 72 0 73 9 February 53 0 67 6 72 0 74 9 March 60 6 69 3 73 0 77 3 April 68 3 69 6 75 6 78 0 May 72 6 70 0 78 3 78 3 June 74 3 68 9 80 .0 80 0 July 73 0 69 0 76 0 80 0 AVERAGE, 12 months 66 8 69 1 73 6 75 2

Australian. Choicest Salted. Danish. 1936-37. Per Cwt. 1937-38 Per Cwt. 1936-37. Per. Cwt. 1937-38. Per Cwt s d s d s d s d 118 3 115 9 127 6 126 6 107 6 117 3 125 3 134 6 100 0 136 9 122 6 145 0 107 9 130 0 122 6 150 0 98 9 111 6 114 9 151 9 94 6 109 3 113 0 132 3 86 6 111 9 119 6 126 9 96 6 117 0 126 9 121 2 104 6 123 9 115 0 125 3 106 0 126 6 110 6 129 6 108 6 119 10 114 9 124 5 112 9 120 0 120 3 124 6 103 5 119 11 119 4 132 8