The Press SATURDAY, JANUARY 27, 1968. Lower Wheat Price

Press, Volume CVIII, Issue 31588, 27 January 1968, Page 12

The Press SATURDAY, JANUARY 27, 1968. Lower Wheat Price

Prospective wheatgrowers who have not already committed themselves to wheat acreages for autumn sowing must now be urgently reviewing their farm programmes in the light of the wheat price announced for the 1969 harvest The Government has not repeated its undertaking to maintain a stable wheat price for three seasons because of the uncertainties surrounding returns from meat and wool. The 10-cents reduction in the guaranteed price for wheat has been calculated to achieve this self-sufficiency and it is assumed that this season’s especially large wheat acreage will produce a surplus for consumption next year. It is still too early to say that this assumption is justified. Disease in some wheat, drought in a few areas, and the cropping of less productive land that was added to the wheat acreage last year combine to leave some doubt about the size —or even the existence —of the expected surplus. The reduced demand for wheat, both for flour and stock feed, may be enough to outweigh an overestimate of the crop. The reduced price will undoubtedly cause new wheatgrowers to think twice about repeating the crop. Many of them, having invested in machinery and storage will conclude that another season of wheatgrowing will be worth while. Uncertainty about Britain’s policy on the importation of Argentine meat, resistance of British consumers to high prices for meat, and the imponderable wool market may make the guaranteed, albeit lower, price for wheat look attractive for another season. The Government has probably lowered the price sufficiently to ensure that New Zealand will not have a continuing wheat surplus a surplus which certainly could not be exported profitably, and which possibly could be achieved only at the expense of other, exportable, products of the land. The widely-expected price cut should cause less disappointment than the Government’s failure to fix the price more than one season ahead. If market prospects for other farm products become clearer this year, wheatgrowers should press the Government to announce in advance the 1969-70, and even the 1970-71, price for wheat.

Housewives who expect the 7 per cent reduction in the price of wheat to be reflected in lower bread prices are likely to be disappointed. Milling and baking costs have risen considerably since the current wheat price was fixed four years ago; they are certain to rise further this year when new equipment is paid for at post-devaluation prices. Millers and bakers will argue, too, that the drop in their output since the subsidy on bread and flour was removed last year has added to their unit costs. They will have to convince an inquisitive Price Tribunal on all these points and the housewife can rest assured that the tribunal will make the most of the pending fall in these manufacturers’ raw material costs.