FINANCE AND COMMERCE.

Press, Volume LXVIII, Issue 20712, 24 November 1932, Page 10

FINANCE AND COMMERCE.

RECORD YEAR OF OUTPUT. NORTH CANTERBURY FREEZING COMPANY. ANNUAL MEETING HULI). A. reduction of charges for the coming season was announced at yesterday's annual meeting of shareholders ot. tho North Canterbury Kheepfnrniers' Cooperative freezing, Kxport, and Agency C(,., Ltd. In the ruse of freezing , barges the reduction is equivalent to II per cent, on lambs anil to 12 pet cent, on shoe]), and in respect ot free storage the period has been extended from two weeks to a month. There was a fair attendance at the meeting, which w.t:. presided over by the chairman of directors (Mr J. 11. Blackwell'j. In. moving the adoption oJ the anI .report and balance-sheet, which were previously published in J nrc l'nrcss, 3fr Blackwell said: - "The year will be recorded in niiv history of the meat freezing indus- • rv as marking one of tho most difliciiK si-iisons experienced. In addition to the severity ot' general economic conditions, farmers in the early months had to contend 'with the greatest drought for 30 vears. Prices also, from the period when main supplies readied the Home market, have, shown a steady decline, tho value of prime lambs, under 3G's, vet-ding from <°[d in London in April t,i 3d in October. Although these have recently improved somewhat, yet the nlurn to the lamb grower has been dis.M.trously low —being below pre-war rates —while his producing costs arc .-iibstantially higher than that period. Handling Difficulties. "'Die freezing companies have their difficulties in handling quickly the quantities of stock rushed in under drought ■ nditions. This year, not only shortage of feed, but the economic pressure to realise on stock, accentuated by the tear of falling markets, caused a rush or stock, resulting in record killing for the early part of tho season. That thesj wcro satisfactorily handled by our officers and staff speaks well for tho ability oJ our organisation and plant to cope efficiently with all demands made oa them. "The total stock killed at Kaiapoi showed an iucreaso of 23 per cent, over the preceding year, and provided a record for the company. This is the best practical evidence of the value of the works to the producers of North Canterbury, and is very pleasing to the directors, who appreciate the continued and increasing loyalty of farmer shareholders.

"Though the number of stock killed was gratifying, it is less satisfactory—though perhaps not surprising under the conditions —to noto that quality and average weight both suffered. The percentage of second-class was greater than usual, and exceeded the previous season by 5 per cent. Tho year 1931 had shown a decrease in weights as compared with tho average of the preceding four year.*, but 1932 registered a farther drop. Compared with tho normal average weights, wethers showed a drop of approximately 31b, ewes 21b, and lambs .1 /lb. Tho early part of tho~ season showed even greater average decreases, but some improvement on these both in weight and quality was shown in the latter half. Kecord Killings. "These decreases of course prejudicially affect the company's revenue from charges which are based on weight. Tho total killings of lamb for the Dominion constitute another record, being an increase of one million over 1931. New Zealand lamb export figures for the past four years are as follows: ,1928-29 .. .. 5,900,000 .1929-30 .. .. 6,900,000 1930-31 .. .. 7,700,000 1931-32 .. .. 8,800,000 Tn three years there has been an increase in the shipments of just under ;>,000,000 ltunbs per annum, or 50 per cent. "In the same period Australia's increase is nearly 2,000,000, and South America's 1,000,000. Tho result is that the "United Kingdom has received approximately 18,000,000 overseas lambs this season, as compared with under 12,000,000 thrco years ago, or an increase <>£ over 50 per cent. "When it is remembered that the farmers iu Great Britain havo themselves been making equal efforts to increase their production, it is marvellous to think that the great market in the United Kingdom—our solo outlet has absorbed such huge quantities, particularly in a period when unemployment and reduced spending power, duo to the severe economic depression, must severely restrict demand. Low Price Levels. "This huge turnover has been effected at tho expense of price, tho level of which reached tho lowest point for a quarter of a century. Tho steady recession in values has mado the season difficult for buyers of meat in New Zealand, who havo been faced with dropping markets. Although this has not affected the company, owing to the contract made for tho disposal of its purchases, yet it has meant disappointing realisations for many valued farmer shareholders, an increasing percentage of whom shipped on their own account. The 'open-door' policy is *a cardinal feature of this company's trading, and the value of that policy ensuring to tho producer every penny of actual realisations, cannot be judged on a single year's operations. "Present meat stocks in store in the United Kingdom and afloat, are heavy, and tho recent advance in prices tends to curtail consumption. For the next Ihreo months supplies are likely to bo large. Recent restrictions, and the Ottawa agreement should tend to shorten Argentine supplies next year, while Sew Zealand has the right to ship an equivalent weight of meat to last season. English and Scotch lambing is reported as good, and the supplies of Home-killed lamb and mutton are not likely to show diminution. "Our agcuts; while hopeful that next season's average selling price will show some improvement, point out that prices have n long way to rise to reach those paid in New Zealand last year. Tn view of the disastrously low price level, and its serious repercussions ou producers nnd the welfare of New Zealand generally, it would seem that producers must look to something outside their trading for substantial improvement. Pelts, Wool, By-Products. ''Owing to tho exceedingly bad state of trade in tho United States of America, which usually absorbs tho bulk of New Zealand pelts, the pelt market iafl been almost lifeless, and,

prices fell to a point which would not return curing charges. Large quantities still remain on consignment in .London The change in political parties ni America will probably result 111 lower tariffs, which should improve _ trading prospects, nevertheless even with some improvement it would appear unlikelv that the pelt will bring anything but a small contribution to the value of the lamb. , , . . , "The same position obtains in regard to wool. At the time when, under .normal conditions, the increased weight of wool should improve skin values, last season declining markets reduced them. The effects of the lower range of values lias been to force the trade on to the finer qualities, which in Canterbury largely predominate. Stocks in these qualities arc not large, so indications point to improvement in the coming sales. Fashion swings toward increased use of woollen clothes, and manufacturers are turning out an excellent variety of high quality goods. Knitting wools are in strong doinancl, and the mills at Kaiapoi are working overtime to cope with requirements in this line. Stocks of medium and low crossbred are very heavy, and appreciable improvement in these would appear to depend on a substantial rise in the finer wools. "Receipts from by-products were again severely affected by the increased slump in values of casings, small goods, frozen sundries, meat meal, and blood-und-bone manure. The lessened receipts from these sources were only partially recouped by the 10 per cent, reduction in wages made by the Arbitiatior. Court. "Under these circumstances the directors are pleased to be able to report that the year's operations liave shown a profit which, they believe, will not be deemed unsatisfactory. Profit and Loss Account. "The profit and loss account shows an increase of £3-152 IDs lid in Teceipts. largely on account of the increased turnover. The overhead expenditure for the year, apart from depreciation, shows a reduction of £929 9s od, in spite of the fact that the company has had the extra costs incidental to a considerable increase in the number of

stock handled. This reduction of expenses is the result of vigilant attention by its directors and management to every avenue of expenditure, ■whereby economies may be effected, eflicieuc\ improved, and costs reduced. Tlie bal-ance-sheet presented to the directors showed a credit balance -of £0022 4s 7d, or an increased profit compared with last vcar of £4382 3s 2d. From the sum of £0022 4s 7d the director.*, though unablo to provide depreciation on the -former scale, have deducted Iho sum of £1335 for this purpose, leaving a credit balance of £132(37 4s 7d, as ]>e;the balance-sheet before you. All buildings and plant, have, of course, been kept in thorough repair and efficiency. The directors recommend that this balance to credit of the profit and loss account, £5207 4s 7d, bo transform! to tho appropriation account. "The directors are pleased to inform producer-shareholders that a reduction in charges has been agreed upon for the coming season, which will be a substantial saving to tho shecpfarmers costs. The freezing charge will be reduced, from ,9d to .8d per lb for lambs, and from .Sd to .7d for sheep, or percentage reduction of 11 per cent, on lambs and 12 i per cent, on sheep. The pen3«l of free storage for clients has also beeu doubled, and, instead of a fortnight, a month will bo allowed before tho storage charge becomes payable. anoa'-J concessions will equal 3Jd on 341b bun and 6d on a 001b sheep carcase, and will show a practical desire to meet tho imperative need of tho producer for ic duction in his operating costs. The Future. "In view of tho uncertainties and changes of tho past two years, prophecies as to the coming season would seem a bold proceeding. A good working autumn and winter has been followed by a fine spring, with rains coming in time to ensure growth. AVlth anything liko normal weather conditions, crops and feed promise to be prolific. The country has never looked better and, with excellent lambing returns, quantity production seems assured. "Prices are, of course, governed by conditions which arc world-wide. Some definite improvement is already shown in lamb prices, and Ottawa restrictions on foreign imports into the United Kingdom should become increasingly effeetivo over tlio next two years. "Tho flooding of tho Homo markets with cheap bacon and pork from the Continent has assisted materially this season to depress the price of other meat, but this is not Ikely to recur to tho same extent under Ottawa rcstiictions. Pelt, values seem at any rate to have touched bottom, while wool prices show a little improvement. With plentiful feed, average weights of sheep and lambs should show a useful increase, while there should also be a lessened percentage of seconds. "Increased production and mainton-

aneo and improvement of quality still remain the 'way out' for Canterbury producers. Hard work and courage must go hand in hand. But, as before mentioned, any substantial improvement in values depends on matters outside the producer's control." In seconding the motion Mr H. Rinaldi said that the thanks of shareholders were due to tho Board of Directors for the position disclosed. Without further discussion the motion was carried. Mr R. L. Hielcs was reappointed auditor at a similar remuneration to that paid him last year. A vote of appreciation of the services of the staff was carried, the secretary (Mr E. T. Shores) responding.