HEAVY BUTTER SURPLUS

Taranaki Daily News, 27 January 1933, Page 12

HEAVY BUTTER SURPLUS

AUSTRALIA FACES PROBLEM. RESULT OF PATERSON PLAN. Owing to the operation of the Paterson plan consumers of butter in Australia pay 6d a lb above world parity. This evens up the price for the exporter, but it has not prevented a crisis from arising in the industry. Australians already pay much more for their butter than New Zealanders, and it would not be surprising if the margin was increased, to the detriment of the Australian consumer. Faced with the expectation of a record year for butter production and the lowest price for 40 years, the Dairy Produce Control Board is now seeking a solution of the problem. The elimination of inter-State competition and the creation of a uniform price is understood to be one of the objects of the board. It is estimated by the board that the output, from July 1, 1932, to June 30, 1933, will aggregate 187,000 tons. The surplus for export is estimated at 117,000 tons, leaving 70,000 tons to be consumed in Australia. Between July 1 and November 30 last year-the first five months of the current dairy year—the production was 7894 tons, greater than during the corresponding period of 1931. The surplus is being exported to the London market, which is already heavily oyersupphed with Australian, New Zealand and foreign butter. The enormous increase in butter production is forcibly illustrated by the fact that last year, for the first time, the value of dairy production—£39,ooo,ooo—- — the value of the Australian wool clip. However, the vajue of butter exported .was not greater than the value of wool exports, because a greater proportion, of the butter is consumed within the Commonwealth. Dairying is ranked third among the export industries, wool and wheat at the top. During the last five years butter production has practically doubled, and in 10 years exports have increased from 32,000 tons a year to 91,000 tons. Calculated on an average basis, the prices !n London during the 'last 10 years fell from 185 s a cwt in 1923 to 96s a cwt—or a fraction under Is a lb—last year. The prices are so low that Australia has not yet felt any beneficial effect of the lid a lb duty imposed on foreign butter by Britain undej the Ottawa agreement. All States have participated in the increased production, but Victoria has been outstanding. . Under normal conditions the dairying industry was advancing rapidly, but during the depression, strangely enough, production has accelerated at an astounding pace. This is mainly due _to the fact that when wheatftprices fell to an unprofitable level, many farmers turned to dairying, which was then giving a far better return. Wheatgrowers were encouraged into butter production, also because of the fact that at a period when money was badly needed they were assured of a quick financial return, instead of having to wait months tor the sale of their wheat.