WHEAT PRICES

Ashburton Guardian, Volume 48, Issue 78, 12 January 1928, Page 2

WHEAT PRICES

THIS SEASON'S CROPS. WHEAT COMMITTEE'S ADVICE. (Per Press Association.) CHRISTCHURCH, This Bay. A statement setting out what has been done by the Wheat Committee set up by the Ashburton conference last month, was made by Mr W. W. Mulholland at the meeting of the North Canterbury Executive of the Farmers' Union yesterday. Mr Mulholland said there was no need for him to say much about the Ashburton conference, as everybody knew what happened there. The Wheat Committee was set up with instructions to endeavour to meet the stock and station agents to try jto find some means of stabilising the wheat market for t.is season, and to take steps to obtain the opinion of growers in regard to the formation of a marketing scheme. The first meetings of the Committee took place on Tuesday night and yfesierday ffioriiiiig'.

Attitude of Stock and Station Agents. Mr Mulholland continued: "A discussion previously had taken place between representatives of the stock and station firms and myself, as representing the Wheat Committee, when we were assured that the stock and station firms would see, so far as it was possible, that those clients who were leaning heavily on them were not forced, through financial reasons, to sacrifice their wheat, and thereby create a slump in the market. They also said that, in general, they were prepared to advise growers, if they were requested to do so, as to the advisableness, or otherwise, of selling on the market as it might stand (at the time when they were consulted). That was so far so good. It means that the market is relieved of any very grave danger from those we have usually described as 'weak holders'—people whose finances are not very strong. A Fair Price.

'The Committee proceeded further to discuss what was a fair price, and what were the prospects of the coming season. They viewed, with some appre-i hension. the tendency of growers, at this stage, in some eases to get 'cold feet' and to be inclined to accept offers of 5s 9d for their wheat. We learned that millers were not at all anxious to buy wheat forward: they, apparently, don't see anything in that for them and, consequently, they are in<clin ed to hold off the market at present. Some growers are inclined to force sales at the present time and, naturally, any endeavour to force sales (which is quite nunecessary .as they have no wheat on hand to sell, and the principal buyers—the millers—are not wishing to buy wheat that they cannot see for some weeks yet, and, consequently, cannot tell quality, or quanttiy, or anything else), any attempt to force sales on these conditions must mean that prices are going to be forced down.. That is to say, if the growers are going to endeavour to make contracts now for the sale of their wheat, they are thus lowering the value of their wheat by their own actions, and at the same time the worth of the wheat—the actual value for milling into flour—remains as it ever was, and it is their action that is reducing the price. ! Advice to Growers.

"The Committee, therefore, very seriously considered what advice they should give to the growers _ and they are unanimously of the opinion : That if growers will refrain from pushing the market, Avhen there is any tendency for the market to sag, for two or three months, the value of their wheat for conversion into flour, under the circumstances as they exist with the new sliding scale of duties, should be 6s 3d f.0.b., on a Tuscan basis. Therefore, there is no need whatever for growers to accept less than that price, and the only reason why they will be required to accept less, or why they will find themselves in the position of being offered less, will be that their endeavours to sell beyond the capacity of the market to absorb the wheat are forcing the price down.

Position Different from Last Year. "Now, the position is quite different from what it was last year. There was, last year, always the possibility, very remote, nevertheless the very distinct possibility, that Australian prices might fall, and the prices of flour, and consequently the price of wheat would suffer a very serious decline. The present position is that there is no danger from a fall in price anywhere outside New Zealand. Because as prices fall (outside New Zealand) the new duties rise and equalise the price here to what the price may fall outside. So there is no danger of the value of the wheat falling. Any fall in price must be entirely due to local conditions of the market which are brought about by growers unduly pressing to sell. "Therefore, it is very desirable that all growers should make provision in one way or another for keeping their wheat off the market for a few months, by the provision of temporary storage on their farms when necessary. Many farmers are quite able to store in the straw in the paddock. Above all things, it is desirable that growers should not get their ' tails down.'

Dangers of "Cold Feet." "The greatest danger we have to face in the next three months in the wheat market is farmers 1 getting c cold feet,' and there is absolutely no necessity for it, because there is no danger of the value of their wheat seriously altering. Consequently, as act-ing-chairman of the committee, I would like to ask the assistance of every member of this Executive in endeavouring to maintain confidence in the wheat market at all times by keeping before all those farmers with whom they associate, the fact that the value of the wheat is not altered, and prices if they do alter are only being altered by the condition of the market, which is entirely in the growers' hands to change." Tendency of the Market. Mr H. G. Parish said that instead of holding for one month, or two months, growers would want to jump in and get 6s 3d. f.o.b. Was there no scheme for an increase of f/or Id, oer month, so that if farmers held they

would lbe in the same position as those who got 6s 3d. Mr Mulholland said that under present conditions the natural tendency of the market must be to rise. Neither iho fanner nor the miller could hold wheat for nothing, and the probability was that toward! the end of the season wheat would be worth perhaps 6d per bushel more than at the beginning. Mr Parish said a miller had told him that the grower who hel'd would be using his brains. Mr Mulholland said that in private conversation with millers he gathered that they were concerned if wheat fell, and, as Mr Parish had said, they were, in a number of cases, advising their friends in the direction he indicated. If they refrained from pushing the market it would be very considerably to their advantage. Mr A. M. Carpenter asked if there were any provision where under the man wanting money for interest, or for any other purpose, and was looking to his wheat to provide it, could be supplied with money. The chairman (Mr J. D. Hall) said that the weak holder was only one half the trouble —it was the men who got "cold feet" that were the trouble.

The Suggested Pool. Mr Carpenter: We are on a different wicket now. The question growers want answered is: At what price are we to sell our wheat? The chaimran said that Mr Mulholland had answered that question. Mr Carpenter asked what steps had been taken, or were proposed, to set up a wheat pool. The chairman said that as far as he could gather from casual conversations with one or two millers, they would very heartily support any organisation that would help to regulate supplies. They recognised that if they did not get something of that kind, there would be a rush into the market during the first six weeks and people would get apprehensive and say: "Just look what happened last year; the price was right at the start, and then was all ] out." That was preventible by getting sufficient information to show the grow-; ers what was the position. "What caused the rot last year was the importation: of 50,000 bags of Australian wheat which resulted in the big northern mill going out of the market as a buyer. Australian wheat would not come in to that extent this year; the sliding scale of duties, as far as anyone could see, was going to protect them. The value of their wheat would depend on how it came into the market; if it came in without glut the value would keep up to what Mr Cbates mentioned about nine months ago. Mr 'Carpenter: Thet© is a time to buv and a time to sell!! The chairman: The time to sell is not now! The grower is not doing himself any good, nor the man who is buying.

Information Wanted!. Mr A. Fisher said that in the Culverden district there was a bountiful harvest. Already growers had sold at 6s on trucks, and agents were running about the district offering 5s 9d. Those who were accepting that price were doing so out of ignorance. He urged that the Executive should issue an official circular, or that someone should address meetings of the branches. Mr Mulholland said that the point was quite an important one, one of the tilings that probably was most necessary a « that growers should know exactly what the position was. He thought that he had made a very frank statement that afternoon, but he could not undertake, especially at harvest time, to visit the wheat-growing districts and repeat it. He and the members of the Wheat Committee were relying_on_the assistance of members of the Executive in the matter of keep« ing growers informed. , Mr H. Olliver: They will see the report in the newspapers. The chairman: That is cheaper than sending circulars. Mr Olliver: It is more effective than circulars. After some further discussion, Mr Mulholland undertook to prepare a synopsis of his remarks for the purposes of a circular to the different branches.