THE PRICE OF WHEAT.
, The most interesting of all questions to. . farmers 1 now that a bounteous harvest bas-.been safely garnered is that of the price which grain, and especially wheat, may be expected to command during the period intervening between the present time and next harvest. Recently, m referring to this matter, we had occasion to point out what appeared to us to be a disparity between the price of flour and the price of wheat, and, though we think we perhaps somewhat overstated the case, through not making sufficient allowance for some items of millers' expenses, the correspondents who favored us with their criticisms, with a liberal allowance of that very cheap article "chaff," which, served as the sauce piquante of their communications, failed to disprove the point which we endeavoured to establish, j which was that either the quotation for flour was too high or that for wheat too low. We merely allude to the subject as a preliminary to comparing the views of some of our contemporaries on the prospects of the wheat market, and will dismiss the question of the relation between the rates for wheat and flour, by remarking that an old formula among millers used to be "2£ times m pounds the price of wheat m shillings gives the cost of flour to the mill," while another similar formula, viz., " thrice m pounds the price m shillings " giveß the price at which flour can be sold at a profit, This would work out, with wheat at 3s, the results — cost price of flour £7 10s, selling price £9, and that we believe to be as nearly as possible correct. However, our purpose just now is not to elaborate this question, but to refer to a matter more important to farmers than the views of millers within the colony — for after all the question of price is mainly determined by the conditions of foreign markets — namely the prospect of demand and consequent prices for exported wheat A ruling factor m the case will undoubtedly be the enormous deficiency m the Australian crops, those of Victoria and South Australia having been unusually light, while that of New South Wales shows a deficiency of 6£ million bushels. " Now, if ever, (remarks the Dunedin "Star") the New Zealand farmers have the control of the colonial markets/ and it adds that "an expert business man has expressed the opinion that New South Wales is able to absorb the whole of New Zealand's surplus." In an article on the same subject the " Otago .Daily Times " writes :— " Some time ago there was an impression m certain quarters that grain would decline m price after the present harvest. There is, however, not the least likelihood of this. It was chiefly owing to the Australian demand that the recent rise m prices took place, and the telegraphic news from Sydney within the last two or three days makes it quite clear that this demand will increase instead of decrease. .... However low her finances may be, New South Wales must provide food for - her inhabitants m some way or other. If we take the consumption at the estimated amount, 7,424,000 bushels, and the quantity required for " seed at 562,000 bushels, the total is close upon 8.000,000, and the deficiency nearly 6,500,000. A rather curious fact was stated m one of Wednesday's telegrams. In making up the estimated consumption the New South Wales statistician allowed 6| bushels per head, while m Victoria only 5£ bushels are allowed. On the former estimate being challenged the statistician defended his calculation on the ground that the adult population of New South Wales wa« larger than that of Victoria. The " cornstalks " thus require more food, and it is not likely they will be content with less than their 6| buuhels per head even m a year of dearth like the present. They will seek contributions from their neighbors m Victoria and South Australia. The yield m those colonies must, however, be also under the average ; and the opinion of those best able to judge is that New South Wales, after taking all she can get from them, could absorb the whole of our New Zealand surplus, and still require an additional supply from America. It is thus about as certain as anything of the kind can be, that the price of grain will be maintained for another year at least." The Oamaru " Mail " also goes very fully into the question. After reciting the figures as to the^New South Wales harvest farnishflß by the Government statistician above quoted and which show a deficiency upon estimated requirements of •6,413,000 bushels our contemporary says : — " Whence is the wheat required to make good this deficiency to be drawn ? To form a just conclusion upon the point we must glance at the position m other colonies likely to affect the general position of affairs. Queensland is never a large producer of grain, and, as that colony, like all others on the Australian continent, has suffered considerably from the drought, she has less than usual to meet her necessities. It is estimated that she will require to import to the extent of 2,107,000 bushels so that the combined requirements of New South Wales and Queensland from, outside are estimated at 8,520,000 bushels. Now, according to the « Australasian," which is generally pretty near the mark, Victoria will have a surplus of 1,500,000 bushels, and the Adelaide papers estimate the surplus of South Australia at 3,000,000 bushels, but this estimated surplus was calculated upon the basis of an average yield of four bushels to the acre, and according to the latest and most reliable information the anticipation of a four bushel per acre yield, which to us m New Zealand appears ridiculously low, will prove by far too sanguine. In fact, it is doubtful if the average yield will reach even three bushels to the acre, and if this be the true position, then the South Australian surplus will be reduced by 1,000,000 bushels. But, m order to be upon the safe side, we should not underestimate the capacity of our rivals, and we, therefore, prefer to strike the happy medium, and will set down the available surplus of Victoria and South Australia at 4,000,000 bushels, but as against this we have the fact that the Cape tnd Mauritius draw largely upon South Australia for their supplies pf breadstuff's, and assuming that the Adelaide merchants will not throw over their customers and so lose what has hitherto been a profitable connection, the surplus available m Australia to meet the needs of New South Wales and Queensland will be reduced to aboul 3,500,000 bushels, thus leaving a deficiency ot fully 5,000,000 bushels, and | probably a good deal more, to be supplied i from New Seilmi or elie where, Tta
only opponent to be feared is California, and as tc the strength of that opponent there seems to exist considerable doubt. According to the " Lyttelton Tinaes," which goes very elaborately into the matter, California must by this time have shipped to Liverpool the bulk of her surplus from last harvest, and she cannot be a serious rival to New Zealand m the Sydney market, unless, indeed, a fall should be experienced m the English market, of which there does not seem to be much probability. The only point that need be taken seriously into consideration is as to the price at which California might be induced to enter into competition with New Zealand m the Sydney market, and upon that point there is a wide divergence of opinion ; for while the agent of the Press Association at Sydney, on the authority of a leading grain merchant of Sydney, states that at the prices now ruling for Oalifornian wheat m Liverpool, wheat from that country cannot be delivered m Sydney at less than 5s 7d, Mr Stead, whose opinion must be accepted cum grano salts, states that at present Home prices California whsat can be bold m Australia at " rather less than 4s 7^d per bushel of 6Olbs, sacks included," Here is a difference of nearly Is a bushel, and upon a clear understanding on this point must depend a thoroughly reliable estimate as to the price we can command for our wheat m Sydney. As at present advised we are of opinion that from 5s to 5s 4d per bushel may be relied upon, with a possibility of higher rates* This wonld mean from 4s to 4s 4d, to the grower. Our advice to farmers is not to attempt to rush the whole of their grain into the market, for such a course would of a certainty force down the price."
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Ashburton Guardian, Ashburton Guardian, Volume VII, Issue 2087, 14 March 1889
THE PRICE OF WHEAT. Ashburton Guardian, Volume VII, Issue 2087, 14 March 1889
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