DEMAND STIMULATED

Taranaki Daily News, 14 January 1931, Page 6

DEMAND STIMULATED

BUTTER MARKET IN BRITAIN FAVOURABLE STOCK POSITION. MORE OPTIMISM IN INDUSTRY. With a stimulated demand in Great Britain owing to lower retail prices the position of New Zealand butter appears much brighter than it did a month ago. Stocks are at a low level and there seem to be prospects of a generally better tone. During the past six weeks the cheese market has been fairly stable at about 58s to 60s, and though stocks are heavy many authorities are of opinion that bottom has been reached at these prices. From the point of view of production the season has been a successful one and in most cases last year’s output has been more-than maintained.

Opinion is prevalent that butter prices will not return to the low levels reached earlier in the season, and on this assumption the majority of factories are continuing with the policy of consigning that was thrust on all at the' beginning of the season. There have, however, been a fair number of sales at prices varying between IOJd and Is. The fall in the retail price of butter in England to Is 2d greatly increased the demand, and at the week ending January 9 stocks in the official stores were only 2336 tons, as against 3500 tons last year. The retail price of butter lias been raised to Is 3d,. and despite this stocks continue low, indicating that the rise has not checked the demand. Production of butter also appears to be as high as last year, deliveries of butter during the week being 1571 tons as against 127'5 tons a year ago. Advances for butter have risen from 9Jd to lOd recently which, allowing for lljd as a conservative estimate ot the value on the present market to farmers should leave a surplus of at least IJd at the end of the season. The fact that there have been offers of Is for up to three months’ make would seem to indicate that the market is considered fairly stable at about present prices. Cheese selling in London at 60s should mean about 102 d a lb. to farmers for the period before Christmas, and ®bout--10 l-3d on a butter-fat basis, after that time. “Pay-outs” over the past months have averaged about lid, but on January 20 the payment will be about 9d per lb. butter-fat. With a stable market this should mean that about 1 l-3d should be in hand at the end of the season. The advances of 4jd per lb. for cheese, which is about 9d on the butter-fat basis, represents about -Jd below the market price of 58s to 60s, which is roughly s£d f.o.b. Milk being manufactured into cheese now will be on the market at the end of March or April, but as prices have ranged about 60s for the past six weeks it seems as if bedrock has been reached. With the heavy stocks in hand, however, there is not likely to be any very phenomenal rise. Already about six shipments of the new season’s make, up to the end. of September, have been sold at prices ranging between 74s and 575. At the presen? time the October cheese is coming on the market. Advances of s|d were made on the November make, but on December 1 the advance fell to 4|d. This covered about half the November make, so that on the present market prices the advance seems to be justified.