BUTTER PRICES

Waikato Times, Volume 127, Issue 21158, 6 July 1940, Page 19 (Supplement)

BUTTER PRICES

POSITION IN BRITAIN In these uncertain times it is unwise to forecast, but we suggest that before long the Ministry of Food will have to do something about butter prices, writes the London Grocer (April 6). On Maich 15 ten days’ notice was given that the butter ration was to be doubled. All the official resources were used to make the fact known and the public were further informed that in existing circumstances there was nothing patriotic in cutting down butter consumption; in fact, those people “who could afford it” were urged to buy butter so as to relieve pressure on the margarine manufacturers. Under this pressure there has been some increase that was hoped for. When it was suggested to the officials that the way to increase the demand was to lower the price, the answer was that the Ministry could not afford to do that. In other words, the inexorable law of supply and demand does not apply under a State monopoly. Doesn’t it! Butter is coming into this country from many sources, and we shall soon be receiving the peak production of New Zealand and Australia. There is a limit to storage capacity, and the surplus must be got into consumption or it must be allowed to go out of condition. That is the operation of the natural law, and the Ministry of Food cannot stop it any more than Canute could sweep back the waves. Reduction of Price

The way to deal with the position is to reduce the retail price by 3d per lb. When the provision trade had control of its own business prices were marked up and down according to the circumstances of the week. It gauged the market to a nicety. If, as happened occasionally, the wholesale price ran up to 150 s, the retail went to Is 6d. Nobody ouiside the Ministry knows, or is supposed to know, what the landed price of butter is at this time. But a shrewd head put it to us that the Control could well afford to invoice wholesale at 140 s, with a possible reduction when the full load of colonial comes along. The Ministry prides itself—quite properly—upon the flexibility of its rationing machinery, which car be rapidly adjusted to increase or decrease rations as circumstances permit. But that is not enough. When there is a “flush” of a rationed commodity the price to consumers must be reduced. It is no answer to this claim to say that the price of a commodity like butter should be kept up to help to pay the subsidy on, say, milk. Butter will not keep indefinitely, and it is surely wise to lower the price and thus stimulate consumption.