TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. MONDAY, 9th AUGUST, 1937. THE DAIRYING OUTLOOK.

Te Awamutu Courier, Volume 55, Issue 3937, 9 August 1937, Page 4

TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. MONDAY, 9th AUGUST, 1937. THE DAIRYING OUTLOOK.

FOR New Zealand the produce season of 1936-1937 is over, and the main interest in the past season is in the results of the Government’s intervention in the dairying industry. A more complete opinion will be formed when the special committee has presented its- report, but in the meantime it can be asserted without the slightest fear of contradiction that the inauguration of the guaranteed price has given the farmers that “ feeling of security ” never previously experienced. That is a condition widely recognised, and has given the industry a stability that is most desirable. Even then, however, the farmers are demanding an increased price this season to coverincreased costs, and the indications are that the demand will be granted. It has to be remembered that the highest price reached on the English market during the season just closed was 120 s per cwt, but it is doubtful whether the average price for the season will equal the guaranteed price; and the conditions of the 1936-1937 season were favourable. Great Britain’s defence programme was intensified as regards expenditure during the second half of last year, resulting in an increase of employment and greater spending power. Then came the Coronation with the huge influx of visitors whose expenditure has been estimated at £10,000,000. Thus the conditions have favoured a big consumptive demand and an improvement in prices. Another helpful factor was the shrinkage of imports of butter into the United Kingdom, the exports from Australia showing a marked decline. Reduced supplies and increased demand should have hardened prices, and no doubt they did, but the improvement was not verygreat. A repetition of such favourable conditions cannot be expected in the new season. Ne'w Zealand is almost certain to inrtease her exports of butter to the United Kingdom, and

as Australia has enjoyed copious rains the output from the Commonwealth is certain to show expansion, and generally we should say that Great Britain will be called upon to absorb an increased quantity of butter this year What effect will this increase in supplies have upon values ? If the demand expands, commensurate with the expansion of imports, the price level may be maintained; but the consumptive demand cannot be expected to be so good as in the season just ended. The British rearmament expenditure should begin to ease during the next twelve months, and that mayaffect employment, and spending power. There will not be the special demand that was caused this year by the Coronation festivities. It would be surprising if in the season of 19371938 the level of values is maintained. The one favourable factor is that Great Britain’s overseas trade is expanding, and that should prevent any serious setback in industry. The position therefore resolves itself into the prospect of the Government having to finance, through the Reserve Bank, another deficiency in the dairy marketing account.