WELLINGTON COMMENT.

Auckland Star, Volume LV, Issue 116, 17 May 1924, Page 14

WELLINGTON COMMENT.

PROPOSED MEAT MERGES. PRODUCE PRICES MUST FALL. (From Our Special Correspondent.) WELL_NGT_r May 14. Representatives of the freezing companies are to meet in on Friday May 16, to consider t_» «,_>stion of a meat merger. At the m*=*lhg held here last month the scheme suggested was that all the meat-freezing companies in the Dominion should be amalgamated, and the control pass to the producers. The scheme in its rough state was submitted to the directors of the proprietary L'oucerns and at the meeting on Friday this matter will be discussed. The whole matter may be said to be nebulous, and the screech of the "Farmers' Weekly" that "information is being deliberately held back," is just so much balderdash. It may be said with certainty that the scheme suggested has not the slightest hope of beng accepted. It is crude and unworkable,- and if the control and management is to pass into the hands of farmers, some people here believe that the industry would soon be extinct. It is to the want of foresight and business ability on the part of the farmers that the industry is to-day in a parlous condition. Works were planted in localities unable to provide adequate stock, or in localities so remote from port of ship- | ment as to make the costs excessive, I and there has been the further element of inadequate capital. The simple fact is that the farmers themselves have created an impossible position by strewing the North Island with unwanted freezing plants and machinery, and the remedy lies in eliminating the number of works. Fall in Values Inevitable. The steady fall in the values of beef, mutton and lamb is inevitable. The downward movement began some time ago, and in their endeavours to maintain values, some' farmers sought to saddle the monopolists with the crime of exploitation, and the result of their agitation was the Meat Producers' Board. This Board makes a good deal of noise, and is very careful to take the utmost credit for every little thing it does, but it has failed to stem the downward tendency of values, for the simple reason that it has, no power to do so, although it exists by virtue of an Act of the New Zealand Parliament. "When we come to consider food products we must realise that ttiere is really only one free and open market for all the world, and that market is Britain," remarked a gentleman closely associated with the export produce business. "Every country with any surplus foodstuffs to export dumps them down in Britain, and Britain is quite willing to be made a dumping ground for food j products, because it is essential to her welfare as an industrial nation that living should he cheap.* Britain simply cannot, go on as at present for other nations with longer. working hours, lower wages and -demoralised exchanges can beat her in the world's markets." This authority pointed out that in 1914 [and the years r prior to" that, prices were very low". For instance in the middle of May, • 1914, Canterbury mutton, medium weight was quoted at 4Jd, while the ouotation now is 7}d. North Island mutton in 1914, was quoted at 3jd. and it is now rnlin. at' 7d. 'Light weight Canterbuury lamb was quoted at 6}d in 1914. and it is now quoted at 10 7-8 d and North Island lamb, which now rules at 10 5-Sd was in 1914 worth only 5 13-lGd. j Position Must Be Faced. Taking a lon» view of the situation it seems that it will he equally impossible -to check the downward tendency of values, and this applies equally to butter and cheese and other food products.' Temporary expedients may prolong- the period of declining prices, but cannot change the. ultimate result. Foodstuffs are pouring into Britain from every source of supply, and this volume of foodstuffs cannot be absorbed at present prices. . Britain will soon be over-stocked with certain classes of food products, and the prices of those products must be greatly reduced to stimulate-consumption.- -We see this operating now in respect of cheese. Lasi 'year New, Zealand cheese was selling at 140/ and over; to-day it is quoted at 84/. When cheese was at 95/ some 1 factories declined to sell, others declined Ito sell when it dropped to 90/, but prei gently they will be glad to take what ithey can get. In May, 1914, New Zealand cheese was quoted at 60/ and 03/, land in May, 1912, it ranged from 70/ to 71/. It is now not very much above prei war level. The most eminent economists jhave warned us that we have entered 'upon an era of falling prices, and while jit is quite right from the producers' point of view to endeavour to prolong 1 the period of the fall, opportunities should not be neglected for readjusting ! and' reducing the costs of reduction. , That would be much more .sensible than indulging in silly fulminations against so-called monopolists. It is Argentine, and not.the monopolists, who is cutting into the British meat trade.