LAMB UNDER PRESSURE

Press, Volume CIII, Issue 30378, 29 February 1964, Page 6

LAMB UNDER PRESSURE

“It has always seemed to me highly probable that we would eventually have to shift the emphasis in our meat marketing away from lamb and towards mutton,” said Professor Philpott after referring to future limited opportunities for expanding lamb production. “This probability now seems a certainty if we are faced with the imposition of physical quotas on our sales of lamb in Britain.”

Professor Philpott said that detailed work at Lincoln on the British price and income elasticities of demand for lamb and mutton had confirmed earlier suggestions that unless there was a considerable decline in British lamb production, New Zealand was unlikely to be able to sell greatly increased quantities of lamb in Britain without suffering fairly drastic declines in price and therefore little gain in revenue. Referring to negotiations in Britain about regulation of meat imports, he said it seemed fairly clear that New Zealand would have to accept some form of restriction on rights of free entry of meat into Britain. His own view was that the outcome was likely to take the form of an arrangement under which British subsidies on lamb Were restricted to some fixed standard quantity, in an attempt to restrain the British producer from increasing output, while in return New Zealand would be asked to restrain the increased quantities of lamb to be told in Britain each year to an amount, subject to prior consultation or argument, which would preserve the stability of prices in the lamb market or increase them. The increased quantities which New Zealand might hope to sell would be largely dictated by the growth of the British population, income and supplies of other meats.

Complex Taking into account all the complex inter-relationships between prices and supplies of different meats and adopting fairly conservative assumptions about the growth in supplies, population and income, and so on, some projections of lamb demand had been made for the next decade, which suggested that to ■preserve stability of prices New Zealand could market at the most about 1 per cent more lambs per year. The growth of new markets for lamb had so far been extremely slow and the problems involved in market development, especially in the United States, seemed to be such that this slow growth would continue for some time. By contrast the expansion of new markets for mutton, especially in Japan, had been nothing short of dramatic—from 8000 tons in 1957-58 to 37,000 tons in 1962-63. Whether this very rapid growth in mutton sales in the future would compensate New Zealand in volume and value for a slowing down in lamb sales was a matter that was now being given a lot of investigation. For the purposes of the present discussion. Professor Philpott said, it seemed convenient to think of two major sources of wool production—that arising from increased sheep numbers in general and second from increases

coming from a shift in emphasis from lamb production ■to wool and mutton. On the first, he said that an important area of research seemed to him to be in assessing the profitability of increased stocking at various levels and of hill country development in particular. The very minimum in the way of incentives to development would be that it was known to be profitable, and even this in many cases would be inadequate. Research into the profl-, ability of development required a lot more co-opera-tion than had been the case in the past between workers, scientists and farm management experts in the design of small farm experiments aimed at establishing the profitability of various management systems. The second source of increased wool production was from greater accent on wool and mutton production at the expense of increased lamb production, both on existing developed farms and in the management systems of developing areas of hill country. In some areas of New Zealand high country and tougher hill country such a move was possibly profitable even at present relative wool and lamb prices, though a lot more research was needed to establish the type of country at which the break-even point occurred.

But on easier hill and lowland country, with present relative prices for wool, mutton and lamb, any switch away from lamb production appeared to the individual fanher to be unprofitable. It “appeared” to be so to the individual because he (Professor Philpott) suspected that over the last five years or so the farming industry as a whole would have profited from some such change in emphasis, bearing in mind the depressing effect on lamb prices of increased supplies compared with the fairly elastic market for wool.

Professor Philpott said that research should now be aimed at assessing the profitability of alternative management systems emphasising mutton and wool production. This would again involve the cooperation of farm management workers and scientists in the proper design of small farm experiements, taking all aspects into account. There was a strong case for cooperation with modem farm management experts, so that wherever possible technical data was obtained in a form that could be used by farm management workers in assessing the profitability of alternative systems. “We have no hope of inducing farmers to adopt improvements that follow from research unless we can, through extension, convince them that change is profitable.”