In an effort to dispose of surplus American butter without selling it directly to the Soviet Union, the Reagan administration is considering a plan to sell the butter to the New Zealand Dairy Board, official sources disclosed yesterday.
The New Zealanders could then sell butter to the Soviets, though perhaps not the same butter bought from the United States.
This aspect of the possible deal has upset some officials in the U.S. Department of Agriculture, who regard the transaction as a ruse to satisfy Secretary of State Alexander M. Haig Jr.'s concern that the administration not send a wrong signal to the Soviets by selling them butter at a price heavily subsidized by American taxpayers.
The New Zealand deal would involve selling about 200 million pounds of American butter at a price substantially lower thanoriginally envisaged for a direct sale to butter brokers prepared to sell it to the Soviets.
The brokers would have paid about $1.05 a pound for it; the New Zealand Dairy Board, a nongovernmental trading organization, would pay as much as 20 to 30 cents a pound less, in part because it would be using the butter to make liquid butter fat and perhaps butter oil as well as selling it in bulk. t
The U.S. government acquired the butter over the last three years at an average price of about $1.50 per pound. It is now stored in deep-freeze warehouses throughout the country.
Repesentatives of the New Zealand Dairy Board were here last week for unpublicized talks with U.S. officials about the possible deal. A newsletter in Brussels revealed yesterday that the negotiations were under way. U.S. and New Zealand sources said that no final agreement has been reached and that talks are continuing.
A senior Agriculture Department official said yesterday that the New Zealand sale is being viewed "very favorably" and that it appears to be the best option available, given the reluctance to sell directly to the Soviets or to brokers who would sell to them.
The White House decided a month ago to avoid a sale directly to the Soviets and also hoped to impose restrictions on any butter sales to foreign countries to prevent resales to Moscow. But, U.S. officials acknowledged, New Zealand is unlikely to accept such a restriction, so Haig, who led the fight against sales to Moscow, would have to be willing to accept this alternative arrangement.
State Department officials said last night that they did not know how Haig will react.
"It's conceivable that this might work" to satisfy Haig's concerns, the Agriculture official said.
The sale to New Zealand also appeals to the United States because New Zealand is the dominant force in the world butter market and is bound to be upset by any sizable U.S. sale. Traditionally, the United States has not been a major participant in international butter sales.
This way, a U.S. official pointed out yesterday, New Zealand would be able to control U.S. butter in the world market, minimizing the effect on its traditional market arrangements. Australia, another butter exporter, reportedly is upset with the idea of giving New Zealand such power.
The Agriculture Department is under heavy pressure to dispose of surplus butter, now being acquired at a rate of 10 million pounds per week.
Storage space may soon run out, and the dairy industry is eager for foreign sales as a means of reducing the cost of the dairy price support program to the Treasury. The sale's proceeds, which could be at least $150 million, would be credited against price support outlays.