THE PRICE OF BUTTER

Waipa Post, Volume XXIV, Issue 1607, 14 February 1925, Page 4

THE PRICE OF BUTTER

UPWARD TENDENCY OF MARKET.

DUE TO CONTINENTAL BUYING.

A continued advance in the price for New Zealand butter on the London market is announced, the latest figure being given at from- 172 s to 176 s per cwt. This advance, which represents an increase of about 14s within a few days, is attributed to Continental buying, and increased consumption in Great '•••* Britain. > Stocks are reported to be short, and the market somewhat irregular. Further advice of the upward trend of the London butter market was received on Wednesday by Messrs Leonard and Son from their London office. This was to the effect that New Zea'.and butter was selling at 176 s per cwt., and that the market was excited.

The following cablegram was received by Joseph- Nathan and Co., Ltd., from their London office: “The butter market has advanced rapidly owing to Continental buying and increased consumption. Stocks are short. Prices 172 s to 1765. The market is irregular.' Cheese 955; the market is steady.” Dalgety and Co., Ltd., are in receipt of the following cablegram from their head office, London, under date 11th February:—Butter: Since our last wire prices are higher byl 8s (now 1725). . . ' RISE ONLY TEMPORARY. HEAVY SUPPLIES DUE. Reasons for the recent rise in the price of New Zealand better on the London market were given in the course of an interview on Thursday by Mr W. Goodfellow, managing director of the New Zealand Co-op Dairy Co., Ltd. Mr Goodfellow stated that the slight improvement recently reported was in all probability due to the fact that many dairy companies were holding back supp'ies in anticipation of higher prices at a later date. Very large quantities of both New Zealand and Australian butter were due to arrive in London during the next two or three months, and no appreciable recovery in that market, under existing conditions, could be reasonably anticipated; The most remarkable feature of the present situation was the relatively high price of Danish butter, which was recently reported to be selling a,t 210 s, or 5d per lb. higher than New Zealand, both wholesale and retail, and further, at the rate of 1500 tons, week in and week out.

Danish butter sales were well spread over the United Kingdom. They were kept at a more or less uniform quantity throughout the year, whereas the whole of the New Zealand butter production was marketed practically in and around London only. During the months of from Novemberoto May New Zealand overloaded her already well-supplied customers, and depended largely for any increase of the consumption of butter reducing sales within that limited area.

Proceeding, Mr Goodfellow said that the New Zealand Co-op Dairy Co., Ltd., and the Market Association, which worked in conjunction with the Co-operative Wholesale Society, has -done a good deal of pioneering work in Manchester and other northern cities, but this individual effort was quite inadequate and counted for little during the flush of the season, when very large quantities of both New Zealand and Australian butter had to be sold.

Mr Goodfellow said the disparity between Danish and New Zealand prices always occurred when heavy shipments arrived from New Zealand and could only be obviated by greatly increasing the permanent number of consumers of the best butter. It obviously did not pay to force down the price to 'the margarine buyer figure. To accomplish this very desirable state l of affairs by individual effort would take many years, and he believed the Dairy Control Board could bring about a marked improvement in a year or two, if it would undertake to do it.

Continuing, Mr Goodfellow said he estimated it would cost at least £25,000 a year for, say. from three to five years, for the publicity selling agents in all the large cities of Great Britain would require to carry stocks ail the year round, and would require to be offered sufficient inducement to push sales of New Zealand butter in preference to Danish. That was a national work, which would certainly give a magnificent return for thi money invested, not only to the producer. but to the whole of the people of New Zealand. In his opinion if the scheme were in operation to-day Danish butter would be selling at about 190 s and New Zealand at, say, 185 s, or at least 2d a lb. higher than the recent prices. Mr Goodfellow said that two leading Wellington newspapers recently referred ito the recommendations of the Dairy Control Board’s delegation as an extremists’ proposal, and indicated that the Board ' intended to try out some theoretical idea. As a matter of fact, the New Zealand Co-ope-rative Dairy Company, Ltd., for the last three years had applied almost identical methods in the marketing of one-third of New Zealand’s butter with conspicuous success. As one of the so-called extremists he had no hesitation in stating that by adopting the Board's proposals the dairy producers would be undertaking no risks but would be adopting a common sense plan which had already proved commercially sound in practice.

Referring to his company’s reduced advance pay-out of 12|d per lb. for superfine butter, to be made on February 20th, Mr Goodfellow said this action really required no explanation. The advance was governed by the prices ruling in England and the prices it was expected the butter now being produced would realise when it arrived in London.