THE BUTTES CRISIS.

Temuka Leader, Issue 10282, 10 January 1922, Page 4

THE BUTTES CRISIS.

MARKET IMPROVING. LONDON, January 5. The butter market has improved daily throughout the week, with a good consumption and demand. Australian arrivals were all cleared. New Zealand cargoes continue to discharge slowly, all selling as soon as available. To-day’s quotations are: Free New Zealand butter, choicest salted, 125 s 'to 130 - Australian 114 s to HGs, unsalted 120 s to 1225. News from Australia with reference to the contemplated action of Australia and New Zealand concerning the acquisition of butter stimulated speculation. To-day the Board of Trade sold 500 tons of good grade Australian and New Zealand at 98k to 108 s, equalling recent weeks’, average sales. ' BUTTER STOCKS. SOUTH ISLAND OPPOSES PURCHASE. TELEGRAM .TO MR MASSEY. HOW THURSDAY’S CONFERENCE WAS ENGINEERED. The South Island delegates who attended the conference of dairy producers at Wellington on Thursday opposed the motion carried hy the conference in favour of the purchase of the Imperial Government’s stocks of butter, and -in a joint statement issued yesterday they gave the reasons for their attitude, and disclose the manner in which the proceedings were engineered so as to. obtain a decision favourable to the purchase. I The statement is as follows: In order that the report of the delegates appointed to attend the Dominion Conference should fully cover the position, it is well to record that a meeting of Canterbury factories, together with representatives from the other parts ’ of the South Island, was held in Christchurch on Wednesday last, when the serious position arising out of the accumulation of stocks held hy the Imperial Government, and their intention to dispose of same regardjess N of market consequences was .considered, and also consideration given to the question of the purchase of these stocks by the Australian and New Zealand producers assisted by their respective Governments After a very full discussion (he following resolution was carried : That realising that the accumulation of approximately 22,000 tons of Imperial butter has got to be realised mostly on the British market, it is the opinion of this meeting that it should be sold on account of the Imperial Government and not on account of New Zealand producers. The following gentlemen proceeded to Wellington to represent the South Island : Otago and Southland, Messrs Bowman, Templeton, and Topliss: South Canterbury, Messrs Booth and Meredith: Canterbury, Messrs Agar. Christie, Hansen, and Smith: Akaroa Peninsula, Mr J. Cunningham. South Island Dairy Association represented:—Mr J. R. Thacker, acting president; Mr G. A. Lamb, secretary. ISSUES BEFORE CONFERENCE. The conference assembled in Wellington, when there were some forty odd delegates present. After discussing the matter for several hours, it was moved, on behalf of the South Island : That realising the 22,000 tons of Imperial butter has got to be sold before any stability will ob-' lain in the markets, this meeting is of opinion the butter should be sold on Imperial Government account through usual trade channels and not puchascd by producers. That the question of regulating shipments and fixing a minimum price for this season’s butter be considered and a Dominion Committee be set up with full power to .watch over the interests of producers, but without the right of purchase. An amendment to this was moved by the Auckland representatives as follows : That this conference of the Dominion butter producers agree to support the scheme outlined by Messrs Ellison and Goodfellow under which the Australasian producers purchase 5(50,000 boxes of Australian stored butler at 74s and 310,000 boxes of New Zealand stored butter at 90s with discretionary power as to price, and subject to reservation as to quality, the finance to be arranged between the London merchants handling our produce and the Commonwealth and Dominion Governments, the stored butter to be vested in a committee of four, consisting of one representative each for Australia and Now Zealand, and (wo Loudon merchants, any profit to bo divided pro rata over the present season’s sales, and any loss to be made good by a levy either on this season’s or next season’s total butter production in Australia and New' Zealand as may be deemed advisable, two conditions being—first, that 50 per cent, of all buffer produced for export in Australia and New Zealand from January 1. 1922, be stored so long as may he considered necessary by the London Committee. 8d per lb being advanced against store warrants, and secondly, (bat two separate pools be established for Australian and New Zealand butter. At GKLAND RESOLUTION DEFEATED. After a full discussion the amendment moved by the Auckland representatives was put to the meeting and lost. As soon as this occurred the Auckland representatives asked for a vote on a tonnage basis (which was established last year with a view of dealing with the qxporl quantity of the butter only). As it is proposed under (lie scheme that the whole of the manufacture should bo levied for any loss, a protest was Immediately entered by your delegates on this method of voting. When tho vote on the tonnage basis was taken tho five Auckland representatives exorcised eight votes, and as there were only another five votes to be exercised on behalf of the Do-

minion it did not matter what any j part felt outside Auckland, they controlled the situation, „ I 1 SOUTH ISLAND DELEGATES i WITHDRAW. This, of course, meant that the attitude which the South Island producers believed to be the best to adopt was no longer before the conference, and as your representatives : were unanimously of the opinion that the purchase was not a wise scheme they intimated their intention of withdrawing from the conference. This attitude was keenely resented by some of the delegates, and your representatives retired to consider the position. Upon returning, a statement of our position was made, pointing out that they had considered it honourable to withdraw from the conference as the course of action proposed to be taken was one that was going to be opposed by us. The Auckland amendment which was now voted upon according to the tonnage basis, was then carried. A committee was appointed to wait upon the Prime Minister and to watch over the interests of the producers in putting forward the purchase scheme. The South Island representatives wero asked to appoint two members to this committee, but declined, owing to their opposition to it. THE SITUATION ANALYSED. We would point out that the discussion at the meeting prior te the. conference held in Christchurch was unanimously of tHo opinion that before any stability could be obtained in (ho butter market the quantity held by the Imperial Government must go into consumption. We believe that if any attempt at bolstering up the market is made the serious position which exists to-day will, continue over next season, whereas, if the butter was sold by the Imperial Government at a cheap rate it will rapidly go into consumption and help more quickly to overcome the present slump that exists in the British markets. The fact must be apparent to everybody that the 22,000 . tons of butter is in existence, and it has got to go into consumption, and that any increase in price will simply mean a reduced consumption, and the carrying over of thousands of tons of butter and prejudice the position at the opening of next season. It is a very difficult, position for the people representing the producers of this country to recommend a course of action which will mean financial crisis to several of the producers at present on the land, yet on the other hand if these producers cannot survive one season of bad times, it is logical to assume that they will find it more difficult to survive two bad seasons. This season’s market is going to be a poor one, although we believe that some improvement will occur in the near future, which opinion is supported by the fact that the Imperial Government have during the present week increased their prices to retailers from 112 s to 114 s per cwt. The Imperial Government in a cable received yesterday through the High Commissioner gave their willingness to extend the option to January 14, but indicated the possibility of reconsideration as far as the price at which the butter offered is concerned. HOLDING BACK HALF OF LOCAL SUPPLIES. One of the particular features in the purchase scheme and the one that is insisted upon by the London merchants is that 50 per cent, of the whole of the manufacture of New Zealand and Australian butler from January 1 onwards should bo hold off the English markets for this season and not sent. Home till next August or later. This condition in the opinion of your representatives clearly shows the weakness of the present purchase scheme. As if it is necessary to hold up half the balance of Australian-New Zealand make it shows the methods to be employed will not rid the market of surplus stocks.; and next season because of the stacks accumulated we will be in much the same condition as we are at the present time; add to this fact fhat the trade at Home will know of the existence of this butter, and financial considerations will bring about weak holders, which simply means that wc are going blindly into a. scheme which will result in weak markets for two instead of one season. It may bo as well to point out in conclusion that there appears very little possibility of the purchase scheme being put into operation now, as cables from Australia indicate that the producers there are not willing to hold back half their shipments. The Commonwealth Prime Minister is not favourable to the Government providing finance, but in case these difficulties are overcome your representatives would like the matter given careful consideration, so that, if the opinion arrived at in Christchurch, and supported by delegates in Wellington, is still held in the south, that representation be made to the Prime Minister intimating our unwillingness to enter into the scheme or to subject ourselves to any levy. We conclude our report by recording the fact thal wo realise very fully the serious responsibility that rests upon us as representatives of the producers. We have, given the various schemes our careful consideration, and believe that tlie course indicated above will eventually resuit in the minimum of loss to the dairy producers of this country. TELEGRAM TO MR MASSEY. The following telegram was sent yesterday by (he South Island delegates to the Prime Minister : The butter resolution to purchase Imperial butter was defeated at yesterday’s 'Wellington conferences but carried after voting on tonnage basis, which course is objected to. South Island unanimously opposes purchase and refused to participate in any levy. Indieveing (hat (he imperial Government should itself, through usual channels, dispose of (heir slocks. Before :my Government action in support of purchase is given we hope you will arrange to hear South Island representatives, also those others present who opposed the purchase. For tlie meeting delegate;,. V. P. Agar, G. E. Christie, ri. ,1. Smith, the suh-committec appointed.