“Reasonable Optimism” On Lamb And Wool Prospects

Press, Volume CI, Issue 29985, 21 November 1962, Page 20

“Reasonable Optimism” On Lamb And Wool Prospects

For both lamb and wool it was possible to feel reasonably optimistic about the season ahead, Professor B. P. Philpott, professor of agricultural economics at Lincoln College, told farmers attending a field day at the college yesterday. It appeared, he said, that there would be no real justification for the lamb schedule being drastically reduced, as in the early months of this year.

But he said that there was a difference in the outlook for the two products. Prices for lamb looked as though they would be fairly good because New Zealand did not look like increasing its kill by a very great amount. Prices for wool looked fairly good in spite of a considerable increase in New Zealand production. “In other words, we should have been looking in the past and should now be looking to ways of rapidly increasing wool production even if this means some slowing down in lamb production,” said Professor Philpott. Though lamb prices were now easing on the Smithfield -market because of late Home-kiUed lambs coming on to the market, the price level was still 2d to 3d per lb higher than at the same stage of last year, said Professor Philpott. For the year he estimated that "the 291 b to 361 b New Zealand lamb would average at Smithfield about 23d per lb, compared with 20d last year. Next Year’s Prospects Turning to the prospects for next year, he said that this would depend on the supply situation, and as far as could be gauged this did not look too bad. There would be a much smaller increase in the New Zealand lamb kill than last year—it was likely to be up only about 1 per cent., compared with 5 per cent, last year—but weights would be higher because of the more favourable season. There could perhaps be a 6 per cent, increase in the weight of lamb going to the United Kingdom—this was about 15,000 tons more. In addition, t -ere would be more lamb and hogget mutton from United Kingdom producers carried over from the 1962 killings, but offsetting this there was the likelihood of less lamb again going from Australia and the Argentine. “On balance I would say

that in 1963 there will be greater supplies in the United Kingdom than in 1962, but not as great as in 1961. The Smithfield price will be a bit lower than the 23d average for this year, but not as low as the 20d average for 1961,” he said. “There is no real warrant, therefore, for the schedule being drastically reduced as it was in the early months of this year. That is some consolation, but in fact it is poor

consolation since the main reason for being fairly optimistic about prices is that our increase in the lamb kill is slowing down and a slowing down in the volume of farm production like this is something .hat the nation just cannot afford.” Access to U.K. Market

The longer-term prospects depended entirely on what happened ih the Common Market negotiations. It was, however, possible to see the shape of there now emerging. It seemed possible that New Zealand would be offered duty-free access to the United Kingdom market for lamb and mutton. In other words, as far as lamb and mutton were

concerned, the United Kingdom was going to be thought of as a market separate from the European Economic Community.

“This is quite satisfactory provided the United Kingdom can continue to take all our potential increased production, but the British themselves have said that sooner or later they would have to impose quotas on our lamb—probably in 1967 when the Ottawa agreement expires,” he said. “This gives the country a bit of time for manoeuvre and for thought and planning. In the research programme of the agricultural economics department at the college we. are deeply involved in making a detailed assessment of the potential growth of the United Kingdom meat market at the moment.’’

On wool prospects. Professor Philpott said that New Zealand's wool clip would probably rise about 3 per

cent, in the 1962-63 season and was likely for the first time to pass the 600 m lb mark, probably reaching 605 m lb. This increase would, however, be offset by reductions elsewhere. There would be a much smaller Argentine clip, a very slight rise in Australian production, no stocks of crossbred wools in the Argentine to draw on as there had been last season, and a much lower level of commercial stocks of wool in hand.

“Over-all, world wool supplies could be lower by up to 2 per cent, this season,” said Professor Philpott. "This in itself would favour a rise in prices unless it were matched by an equivalent fall in mill consumption. "But in fact mill consumption has been running at higher levels than in 1961-62, though there are some spotty patches. The most favourable feature is the situation in Britain where the new Chancellor of the Exchequer. Mr Maudling, has introduced a set of measures amounting to *a little budget’ to expand the British economy over the next year. This move is of course not unrelated to the fact that there is an election in Britain next year, but it is also related to the fact that Mr Maudling, as well as being a good politician, is also quite well-known as a good economist. Better Price

‘Taking account of current trends in mill consumption, allowing for expansion in Britain and even allowing for some recent slowing down in economic activity in the United States. I consider it is very likely that world mill consumption of wool will rise by 2 to 3 per cent, this year. This in conjunction with lower wool supplies will make for a better over-all price for wool this year than last.

“In fact this has already

happened—the current sales are running at better levels than at the close of the last season by Id or 2d per lb and I think we would be safe to assume that this will continue,” Professor Philpott said.

Opening the field day. the Minister of Internal Affairs (Mr Gotz) said that he was not despondent about the future. New Zealand, heggid. had a wonderful climate and people and her negotiations with the Common Market were in good hands. He felt New Zealand had the sympathy of the Common Market countries.