BUTTER=FAT PAYMENTS

Waipa Post, Volume 32, Issue 1925, 23 October 1926, Page 4

BUTTER=FAT PAYMENTS

WCAI COMPANY'S POSITION. . iRHASONS FOR UDWIEIR AIDVAINCR iln a circular letter to the suppliers of thtei Te Awamutu Co-operative. Dairy Co., Dtd., issued! this weett, 'the; secijetary (Mr A. J. Sinclair) selte out the (position as under:— -.;:.?}.:. ' A)b no time sihce the slump^in/1922 has the London bultter mapkef ; in so /parlous a condition. Advices received from the Dainy Produce Con- , trol Board tills w/eek state that advances against "finest" butter an& reduced to Is per lb., and first-grade to ll|d(. Cables from London indicate that there are still over TOO.fIOQ ■boxes'in store, and that thie .nominal quotation is 138 s to 144 s iper cwt., although no grt-at quantity lis passing at tihese prices. Private advices received in Auckland during, last week end indicate; that sales of New Zeahrnd biitt'er are being made alt 128 s per cwt., which is equivalent to abdut Is per lb. fco.b., Auckland. , 'At a Board meeting held on Saturday, your directors reviewed thie position *with the igravest concern. The s.s. Tongariiro has arrived in 'London with an isiarly shipment olf the present season's make, and from now ton, sh'ipmients will arrive at frequenit intervals. With; prices, als they are at present, no factories in New Zealamkl will realise thfei amount drawn against * these shipments. In tihe case of some dairy companies, tihe position is aggravated by the fact thalt they are still holding large quantifies of last Season's butter. We are 1 gladi-lto report that, with regard to last season's output, your directors 'supjportted the policy of selling on arrival, so that we are free from any alnxilc|ty on that score.

Owing to the kefemness of competl- -.1 tion, there 1 is a tendency for dairy companies i)o. (pay out inflated prices in'thia early months of the season in order rto attract supply, an adjustment being made in the flu#i motaiths by a redudtion h*n advance 'payment, tin- ' der normal conditions no great harm accrues from thi s <poiiey, although it'' is dioubtfiall if it can be justified under any circumstances. Your directors believe thie* present fptoisiltion to be , so serious !tha|t, oab matter how disturbing lower ad/vances may be, our suppliers would prefJetr that we follow a conservative policy (rather than pay out ■an unwarranted iwiicj& ) and gamble on an early recovery of the market, with the possibility of a recla- Y majtiton later in thtei season should the . market remain at j|ts present 'level.- We believe thalt,. in fixiug the advance payments for Septembter butterfat at Is lid per lb. in cash for iflrst-grade cream, w<e have gone to tihe utmost extent thajt is justifiable, as our advices from London are to the (effect that no immediate improvement can be looked for. Should ttt happen that the market rises, and our September •buttter realises betker prices than -are at present likely, your directors will at the earliest moment make a sup-' •pHementary payment on last month's •supply. •>*

. The directors trust that Itbelr in adopting a cautious policy *afc{this crijtical stage, although unpSaasant, 'will have your endorsement. y \