Bright Future Forecast For Export Industries

Press, Volume XC, Issue 27407, 21 July 1954, Page 7

Bright Future Forecast For Export Industries

(From Our Parliamentary Reporter)

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MEAT EXPORTS U.S. Market “Very Promising” FLEXIBILITY OF DAIRY OUTPUT f From Out Parliamentary Reporter) WELLINGTON, July 20. Though Britain will continue to be New Zealand’s chief market for its meat exports, there are “very promising” prospects for the development of a large market in the United States over the next 20 years. This statement is made by the Prime Minister and Minister of Finance (Mr Holland) in his Economic Survey for 1954. The survey, after tracing the history of New Zealand’s export trade in meat, assesses the prospects of the industry in the light of today’s conditions. “The United Kingdom has been and will continue to be our chief market,”says the survey. “In that market we will have to compete with other suppliers. Some of these suppliers, because their own population is rising, may have less meat available for export in future years. “Others, like New Zealand, may be able to increase their exports. No steep increase in home production of meat in Britain seems likely. In general, there are no signs that the British market will be flooded in future years. On the other hand, an expansion in consumption is likely. “If the present population of the United Kingdom of just over 50,000,000 consumed the pre-war quantity of 1261 b a head, total consumption of meat, excluding canned meat, would be more than 450,000 tons more than in 1953. This is considerably more than total exports of frozen meat by New Zealand in 1953. . . . Chilled Beef Trade “The resumption of free trading and the end of meat rationing in the United Kingdom provide an opportunity for trade in chilled and baby beef, which command a better price than frozen beef,” the survey says. “After some experimental shipments, we are now exporting chilled beef on a commercial basis. Before the war, about half of our quarter beef was exported in chilled form, and it is possible that a greater proportion will be exported chilled in the future.” Population growth in the United States was estimated, in the Paley report, to outstrip production by 1975, the survey says. Though beef consumption was estimated to increase by 42 per cent., beef production was likely to increase only by 15 per cent. For pork, the figures were 55 per cent, and 25 per cent, respectively and for mutton and lamb 52 per cent, and 10 per cent.

“If these estimates should turn out to be correct, the outlook for imported meat, particularly beef and possibly lamb, seems very promising,,” the survey says. “Other countries will no doubt try to get a share of the expanding United States market. High quality and attractive presentation will be of paramount importance if New Zealand is to share this market.”

Dairy Produce The flexibility of the dairy industry, enabling it to switch from butter to cheese or other milk products to be used as food or for industrial purposes, is described in the survey as one of the strongest features of the industry. “Although the high capital cost which would be involved in alteration of plant and the difficulties on farms of alternating between milk and cream supply, would limit the extent to which the industry could switch production in the short run, there is little doubt that it could adjust itself to any long-term changes which might occur in the relative demand for its various products,” the survey says. The United Kingdom usually buys much more than 90 per cent, of New Zealand’s surplus dairy produce, says the survey. In spite of the trend in Britain since 1938 to consume less butteb and more margarine, it is not unreasonable, “having regard to the rising population in the United Kingdom, to expect that the present level of consumption will be at least maintained. It is not possible to estimate future prices of butter, and the importance of keeping production costs low in New Zealand cannot therefore be over-emphasised.”

Prospects for Cheese The immediate cuclook for cheese is not favourable because of the increasing amounts produced in the United Kingdom: but because of the high cost of locally-produced cheese, the Government has mod-fled its guaranteed price for milk in a way which is expected to reduce cheese production, the survey says. The United States is considered unlikely to become a substantial importer of dairy produce “in the foreseeable future.” Increasing stocks of milk powders in the last year or so led to a marked fall in prices, “but from a long-term point of view, these products may prove a valuable source of supplementary income,” says the survey.

duction will be necessary even to maintain present living standards while the world’s population maintains its present annual increase of 30,000,000 to 35,000,000. Increased populations and rising standards of living will result also in a substantially higher demand for fibres, says the survey. It is becoming more and more evident that synthetic fibres and wool may be complementary rather than competitive. “An assessment of the broad outlook for food and wool thus indicates that an increasing volume of exports can be sold at profitable prices,” the survey says. “This prospect will be enhanced by progress towards higher levels of international trade generally and towards freer systems of world trade and payments. New Zealand, with its favourable climates and the high level of efficiency and skill of her farmers, is well placed to benefit from the likely increase in demand. “However, the extent to which New Zealand will in fact benefit in the long run depends not only on world prices of her main exports, but also on the production by New Zealand farmers of meat, dairy produce and wool of the highest quality, and on their ability to keep their production costs low in comparison with those of competing countries,” the survey says.

DEMAND FOR WOOL FUTURE VIEWED WITH CONFIDENCE (New Zealand Press Association) WELLINGTON, July 20. “There is little doubt that the individual woolgrower should be able to lay his plans for extra production with confidence in the long-term prospects for his product,” says the 1954 Economic Survey, concluding a six-page review of wool marketing and an assessment of the outlook for wool. During recent years, the appearance of a number of new man-made fibres failed to divert the strong demand for wool: “in fact there has been a reaction from exaggerated claims for some of these artificial fibres in favour of wool. Wool has many natural advantages, and those few weaknesses which it does possess are being oyercome. ... “With rising populations and living standards, and with economic recovery in wool-buying countries like Germany and Japan, the evidence is that on balance demand for textile materials and for wool will steadily rise,” the survey says. “As wool production cannot expand other than slowly, the new artificial fibres will undoubtedly benefit, and greater production would enable them to be produced more cheaply. However, experience is showing that their future role may lie in complementary use with wool. Admixture often imprives the qualities of both.

“The future of wool appears bright, but, as wool’s - history amply demonstrates, the possibility of sudden price breaks cannot be ruled out,” the survey says. “Much depends on the direction of economic trends overseas. Drastic price falls seem unlikely on present and immediate future prospects, but if a dip should occur, New Zealand producers, with current prices at almost double the present floor price, are favourably placed. “Growers still have £17,000,000 available in the ‘wool-freeze’ accounts. They have a measure of collective security in the floor price scheme, which is available with funds to supplement growers’ incomes in the event of a sharp price drop.”