The Wanganui Chronicle MONDAY, DECEMBER 15, 1930. BUTTER PRICES

Wanganui Chronicle, Volume 73, Issue 449, 15 December 1930, Page 6

The Wanganui Chronicle MONDAY, DECEMBER 15, 1930. BUTTER PRICES

•pHE recovery of the butter market lias caused many people to hope for too much. Undue optimism is as useless as a barometer that always points to “Fair,’’ and therefore jumping to the immediate conclusion that matters arc on the road to quick recovery should be discounted. There is, indeed, ground for believing that the movement toward improvement has not yet exhausted itself, and it is to be sincerely hoped that the improvement in the market will continue. The recent reports of bad weather in Australia may have had the effect of buyers anticipating a shortage from that quarter. This news, together with the low prices that have prevailed in Tooley Street for some time now have started a movement from a level which buyers have come to regard as rock-bottom. Further, another factor has doubtless been operating, and that is the element of displacement. When butter falls to a low level it displaces margarine and other substitutes, and when butter has become reestablished for some time with the larger number of consumers the price of that commodity can rise to some extent before that commodity is given up in favour' of margarine. Low price levels may be said to educate more people to the use, or consumption, of the product, hence periods of low prices are definitely desirable at times. Low price periods counteract replacement by an inferior but cheaper product and so. although they are inconvenient, low prices may be regarded as the payment of insurance to keep, and to increase, the market. When this action has made itself felt an uplift in prices can be expected. A note of caution at the present, time is, however, not out of place to prevent too great an anticipation of the recovery of the market.