Wool Floor Change Not Unexpected

Press, Volume CVII, Issue 31501, 16 October 1967, Page 12

Wool Floor Change Not Unexpected

The main reaction of Canterbury farming leaders to the change in the floor price system for wool announced on Friday was that some such alteration in the system was not unexpected and that farmers’ own resources and those of the country could not be expected to support the market indefinitely.

From the Auckland sale on Wednesday, the Wool Commission will not buy in wool until the market falls below an average of 16] c, but growers’ returns will be subsidised up to an average of 25c, which was the old floor price. “I was expecting that when we got d wo to having to call on public funds to support the market that some change would have to be made,” said Mr R. H. Bedford, president of the North Canterbury provincial district of Federated Farmers. “I was not surprised.” There was no sign of improvement in the economic situation, especially in Britain, which would justify an optimistic outlook about woo! in the near future. But if the old floor price had been the problem for overseas buyers of New Zealand wool, he said referring to the 35 per cent drop in the price below which wool would be bought in, then this should get wool moving again.

The chairman of the meat and wool section of North Canterbury Federated Farmers, Mr A. F. Wright, also said that the commission's decision was not a great surprise. While the structure of the reserve price scheme had now been jeopardised, the farmer remained in the same position with an average reserve price of 25c per lb and the dropping of the floor price to buyers to 16]c should mean that almost all of the current season’s clip was cleared, and if this was the case it would prove that the right course had been taken After all that had gone on over the last two months, this could mark a reappraisal of the system of marketing the New Zealand clip, and if this was so and better marketing eventuated, then some good would have come from what seemingly was not a very happy situation.

His first reaction was that it was because of the state of the economy that this action had had to be taken, said Mr D. K. McKenzie, president of Mid-Canterbury Federated Farmers.

The principle of supporting the market was to try to hold on until the market recovered, but it appeared that this was more than the farmers’ reserves and the resources of the country could handle. The aim had been to control the surplus wool when the market was weak and then control the feeding back of this wool when the position recovered, but now that wool would be available at a near sacrifice price someone else would have control of this wool when the recovery came.

The president of South Canterbury Federated Farmers, Mr R. M. Ford, said he felt that the decision would be “a terrific shock” to wool producers. “I rather feel that the whole exercise is rather a tragedy for the wool producing industry of the country.” While it was absolutely essential to get wool moving again, farmers could not very well accept a price below a certain level. A good farmer neighbour of his had about three years ago told him that at anything under 30c per lb for wool there was little margin left for development. From a farmer’s point of view Mr Ford said that the new price down to which wool would be available to the trade—l6ic —was “quite unrealistic.”