DAIRY PRODUCE.

Taranaki Daily News, 7 September 1923, Page 7

DAIRY PRODUCE.

FICTITIOUS VALUES. THE TROUBLES OF TOOLEY STREET. (Wellington Post’s Correspondent.) London, June 22. New Zealand producers will, doubtless, have gained some satisfaction during this past week in reading cablegrams showing both Danish and the Dominion produce quoted at 1545, to 156 s per cwt. It is perhaps as well to know, however, that this does not mean than at last the public recognise that our 'butter is as good as Danish and are prepared to pay the price. As one Tooley Street merchant explained: “New Zealanders can have a parity in the quotations if they like but they can’t sell their butter.” When investigating the butter position in these days it has always to be remembered that' there are two camps—those who call themselves legitimate traders, and those firms which are agents for the New Zealand Co-opera-tive Dairy Company. The former frankly blame this latter concern for most of their troubles, while the agents of the dairy company carry on an 4 keep quiet. The price of Anchor brand butter which they handle is dictated by headquarters in Gracechurch Street, and all they have to do is to obey and draw their commission. I have had a conversation with several of the traders outside the control, and the remarks that follow in this article are based on their opinions. No doubt the New Zealand Co-operative Dairy Company could very well justify their trade principles, but my present object is to reflect the feeling of those who are in antagonism to the semi-control which is exercised by the co-operative concern. PRESENT POSITION. First grade New Zealand butter is quoted to-day at 152 s to 1545. There is a very large quantity in cold store, and during the next five days the Raranga, the Hurunui, the Tainui, the Kaikoura and. the Mahia will arrite with fairly large consignments. Much of the butter on these vessels belongs to the New Zealand Co-operative Dairy Company, and it is said that the bulk of this will go into cold store if it is not possible to obtain 160 s for it. It seems, however, that the independent agents have also been receiving instructions from factories in New Zealand to hold for certain prices, and it is felt that this general attempt -to manipulate the markets is the result of unhealthy propaganda in New Zealand. The agents are naturally in a better position t-o see what is the trend of prices, but any unforeseen circumstance might occur to prove that the people in the Dominion were right after all. So far as can be seen, however, the tendency of prices is downward, and big buyers anticipate that the price will go down to 140 s. in the next week or two. Irish, Danish, and French butter is coming in in steady supplies. For the first time since the war butter from Brittany—an excellent brand —is now available in large quantities, and is being sold at 142 s per cwt. The lack of sunshine has acted detrimentally on Home and Continental supplies. This is fortunate for New Zealand. Had there been a good summer here the amount available would have been doubled, and any attempt to hold on to New Zealand supplies in this country would have ended in certain loss. As it is there is still a gambler s chance that later prices will be satisfactory. A few weeks’ sunshine here will lessen this chance. Another thing to be remembered is that the storage of butter costs 4s per cwt. a month in rent, management and interest. Moreover, when the butter is released buyers dislike it, and they ask for butter from a special boat of later arrival. This further complicates matters.

HORSES THAT WILL NOT DRINK. It is maintained that the present price of New Zealand butter is an artificial one. It has been forced up to a parity with Danish, but it should be understood that the two countries are really not in competition. The immediate result of this parity is that the sale of New Zealand butter ceases in the North of England. “In Birmingham, Manchester, Liverpool and in the great manufacturing centres,” said one agent, “we cannot sell a box of New Zealand butter. We have to get 10s below Danish to get moving in the North. Denmark sells her butter from week to week. The Danes never store their butter, but if they cannot get the price thev want for it they will take a lower, blit they sell it, and in the long run they will ‘do better than by tryxng to manipulate the market by holding. “We have a lot of New Zealand butter off the market at the request of factories, ’ said my informant. “They have put impossible values on it. They have got in the back of their minds the fallacy that there is the possibility of netting almost any price for it they like to name, so long as they have a combination strong enough to force it out of the public. They have also got an idea that New Zealand butter should be stabilised at about 2DOs per cwt. The sooner they can get away from that idea the better. They believe that by some occult process there is something that can be done that can bring prices which economic'conditions will never allow. We have never had a season in which there have been so many instructions from New Zealand. Cheese is at 88s to 90s and is dropping back slowly, but I have received a cable saying that a certain brand should not be sold until the market reaches 110 s, and in another case until the market reaches 100 s. There seems to be some people in New Zealand stumping the country and fillhp- the farmers’ heads with wild ideas. \“This semi-control is doing an incalculable amount of harm. It is making the people feel that they do not want to have anything to do with New Zealand butter if they can do without it. Unless every butter-producing country -in be brought into the combine, manipulation of market can never do any good. Some people in New Zealand imagine they can establish for all time a nrice similar to what was obtained during the war. Fictitious prices will reflect on land values, and in the end there can only be an unholy collapse. UNNECESSARY LOSSES. The chief objection to any artificial forcing up of prices seems to be the terrible uncertainty of the market. Stimulation is often followed by a serious drop—a drop which cannot be held within reasonable bound because buyers refrain from operating, and thus in wailins to see if rock-bottom is reached push the price still lower. When, the reflex from artificial prices begins it is 0-reater in « downward direction than the economic conditions and the quantity of supplies warrant. Thousojius of pounds are lost unnecessarily, and Too-

ley Street men grow old before their time. It is not difficult to see the anxiety that has been brought into the lives of those • who deal in butter and cheese since vthe element which was meant to be a steadying influence has apparently reduced the business to a gamble.