LOWER ADVANCES

Wanganui Chronicle, Volume 74, Issue 114, 16 May 1931, Page 8 (Supplement)

LOWER ADVANCES

DAIRY EXPORT TRADE A SERIOUS POSITION j i i I A brief announcement to the effect | that advances made by London im- ; porting houses on butter and cheese | from New Zealand appeared recently, j The revised rates are: Butter, 9Ad pci i lb; cheese, 3-Jd per lb. The meaning I to be read into this announcement is | that the immediate future < ’ the New I Zealand dairy produce market is viewed ’ with misgivings at the London end. 'The firms handling consignments of butter I and cheese usually make advances to | the dairy factories of S 5 per cent, of the current prices, that is to say, it I New Zealand butter is worth, say, £5 per cwt (and it is now down to 105 s to 106 s per cwt for “finest” quality), the dairy company will receive in advance from the firm handling its produce £4 ss. The full value received on realisation has incidental charges, being ultimately accounted for. The. rates of advances, however, may be taken as indications of future as well as of present values, and those values to-day are below cost of production. In fact, a serious position has arisen in the dairy export trade of the Dominion. The course of the market this season is shown in the history of the rates of advances for 1930-31.

It is understood that as soon as the markets for butter ami cheese improve ; the advances will be increased; but the cablegrams published hereunder do not 1 hold out much hope 01 any genuine rise in the markets. There may, however, be a flutter due to speculation, but the odds arc against any definite and lasting improvement for the balance of . this export, season for two reasons:— , (1) As to butter, the normal seasonal increased supplies from northern hemi- ‘ sphere sources, and (2) as to cheese, ( the heavy stocks held in the United Kingdom and in New Zealand, and the . increase in the seasonal contributions to the market from Canada. The British j stovk position of butter, as reported by , the Dairy Board, London, May 1, is as

1 The above returns show a substan- 1 tial reduction of holdings of butter, and - triis is partly accounted for by the | great impetus given to its consumption by the low prices; in short, the butter | is being “eaten” —at present prices, | viz.. Is to Is Id per pound for New Zealand and Is 3d for Danish. Cheese Position j Cheese consumption, however, not- ' withstanding its attractive retail price, is not similarly increased, and something requires to bo explained as this seeming paradox of low prices and reduced consumption, for New Zealand cheese is selling in England to-day at generally below prices it commands in New Zealand itself; and the cheese so sold at Home has to carry freight, in sura nee, interest, and other charges before it reaches the grocer’s counter. ■ The price of New Zealand cheese in the British shops to-day is 7d, and graded cheese at that. The Dairy Board reports New Zealand butter selling in the north of Eng ' land—the Danish stronghold, at Is Id per lb, and Danish at Is 3d. “It is many years ago since such a low price was returned for butter-fat,” said an authority in the New Zealand dairy industry in commenting on the new rates of advances. “It means that dairy factory companies will not be abh* to advance to their suppliers, the dairy farmers, more than 9d per lb for butter-fat. “The butler men may squeeze through and pay interest on capital at lid to Is per lb, and perhaps over the season they may average Is: but. I cannot sec how the cheese men can carry on at present prices of 7d to 8d per lb for butter fat.” Does not quality enter into the matter, espec.iallv in regard to cheese. l was asked. It was admitted that this was so. Ne\ er was it more necessary in the whole history of the New Zealand dairy export trade than now for the dairy producer to supply an article to the British market that would justify no reason for caveiling at. its equality. Today “full-cream” New Zealand cheese brought Is per lb premium. Produce Sold Home dairy factories sold their pro j ducc free on board during this season.! Others, and those in the great majority, adhered to a policy of consignment. I This is a matter for individual com- ‘ panics to decide, and any direction ot the future course, to pursue would be out of place in this column, but it may be interi ting to show how some “sell ing” factories fared at various times during tlio season, the dates of sales ( being compared with advances as given Butter sold:—July for July August make. Is I£d; September, for early ()c tober make and shipment, Is Id; and ■ September make. Is Old; January, foi February ami March make. Is, Is 6|<l; ■ February, for February shipment. Is ’ 0”d; and for .March shipment, Is This business was for one North Islam! company, and the total quantity of but ter involved was 25(1 tons. Other butter sales noted were on the same basis, but business was done in February for February to March at I--o:'id; in April butter was sold for April. May. and Inly shipment at Is. ('house is usually sold by South Island makers, but in the sales referred to hereunder there was some . North Island business at tin* following prices;—January to March make. 51<l; February 7 to end of season, s|d; Fel- • ruary 16 to end of season. 6d; February r 23 lo end of season, 6d to 6|<l; but mainly 6d; March 16 for Man h April make. blsu balance of season 6 3-16 d.

Butter Pence Cheese Pence Date. per lb. per lb. August 1 .. .. .. P2 (5 September 1 .... .11. (» October 1 .. .... JO f. I November 1 .. .. (I 1 r > 1 December 1 . » 9 4 January 1 .. .. .. 10 j i. February 1 . ... 10 4 March 1 .. .. .. 11 April 1 .. . 4 May 1 .. .. .. .. 91 •J A

follows: — New Zealand .... Australian Mav 1 .1931 Tons. 5178 1600 May 1, 1930 Tons. 9950 Cheese stocks compare as follows:— May 1 May 1, 1931 1930 New Zealand crates 175,215 125,559 Canadian boxes . .. 138,557 100,609