PRICE OF BUTTER.

Star (Christchurch), Issue 16518, 31 August 1921, Page 7

PRICE OF BUTTER.

INCREASE TO-MORROW. A FREE MARKET. Butter prices will go up by about one penny a pound to-morrow. In retail shops where the present charge is 2s Id, tho new charge will he 2s 2d, In other retail shops the charge will he 2s 4d instead of 2s 3d. If it were not for “ cutting ” tactics, the all-round price would be at least 2s 4d per pound of first-grade butter. The direct cause of the increase is the fact that Government control has come to an end, and that the payment of 2d per pound subsidy will cease from to-night. This wall give producers a free market. A great deal now depends on the demand from Great Britain. The local price will be regulated by the export price. Some of tho factories have sold September and October butter at 2s Id a pound, but it is not clear yet that this price can bo secured for the output of all factories, or for the whole of the new season. If the factory price is to be taken as 2s Id q, pound, the retail price throughout New Zealand for first-grade butter will rise almost to the 2s 5d level. Thero is a chance, however, that local consumers will benefit from the accumulation of supplies in the North Island. where the winter has been exceptionally mild.*

For some reason, dairy factory managers were not prepared to givedefinite information this morning. Several said that meetings had still to be held, and that the price to he charged to grocers would he advertised tomorrow. In some quarters it was hinted that this rate would be 2s 2d, a rise of ljd a pound. “The big factor,” said one authority, “ is the position at Home. Lately the market lias been firm, and the prospects for next season are very good indeed. Other countries in Europe have been affected by the recent drought, and that has improved the demand for New Zealand butter. It is all a question of supply and demand. Government control has now ended, and factories have a free hand, bring governed by nothing hut ordinary trade conditions’. The 2d per pound subsidy has come to an end, so the Government is saved a big item of expenditure. How much consumers will have to pay. I don’t know. A charge of 2s 5d or 2s fid does seem high, hut people must he prepared to pay what tho commodity is worth, judged by the world’s parity. Butter has saved the country. Wo would bo 'well down ’ but for the dairying industry.”

grocer said that he knew’ nothing of the new price. Right through, tho retail trade had been ignored by both tho Government and the wholesale people, and the present was just another instance. “When the factory cart drives up to-morrow, the man will say, ‘ Here’s your butter. The price is so much.’ Then I will know what has happened. The factories dictate and we have to obey.”

li Expect a rise of one penny at least,” said another storekeeper. “ Wo would put more on, if it were not for price-cutting. By rights we should sell at 2s (id, because our overhead expenses run to 17 per cent. We have to pay for wrapping paper, string, and the assistants’ time in serving the customer. Things may ease up later when the export market drops.” In another quarter, it is stated that New Zealand consumers in recent years have been paying the price of first-grade butter (modified by the subsidies) for most of the butter they consume. It has been pointed out that they have not always been supplied with what they are paying for; that is. butter of a quality that the Government graders would pass for export as first-grade. This is a point that may receive the attention of the Board of Trade. Consumers who want the best butter will have to pay the export price plus the local charges. But people who are prepared to accept the inferior grades expect to get the advantage of lower prices. Against this, one trader says that there has been no inferior butter sold in Canterbury for over a month. When it was offered, very few bought it a second time, even for cooking. Second-grade butter is a poor seller always.