Dairying Now Feeling Cool Winds

Press, Volume CVIII, Issue 31754, 10 August 1968, Page 8

Dairying Now Feeling Cool Winds

Although many farmers would not be satisfied with the prices that they were now getting for their wool, the president of Federated Farmers of New Zealand, Mr P. S. Plummer, told former Nuffield farming scholars attending a reunion conference at Palmerston North this week that there was little doubt in his mind that “the heat has now moved off wool on to dairy products.”

Mr Plummer, himself a former Nuffield scholar, told the conference that the dairy industry was going to have to give a lot of attention to the short term prospects for its products. The short term outlook was not very bright, he said, and things could get worse before they were better.

Turning to wool, Mr Plummer said he believed New Zealand could now sell, and would be able to continue to sell, all of the crossbred wool that it could produce. He thought that the price would go up a little, but it had to be faced fairly and squarely that the grower would not get the high prices of a few years ago. If prices suddenly rose to the levels of two or three years ago, it could result in woolgrowers being put out of business. So long as the market went no higher than 27c or 28c per lb in the next two or three years, growers would be back in business again in a big way.

The basic problem was surplus production, mainly in the countries of the European Economic Community and the United States, and these surpluses would continue to grow while the E.E.C. adhered to its present policy.

In these circumstances the only course open to New Zealand was to meet the market and sell its produce. As distasteful as it might be, it would be the only way to get other people to change their policies, although some big decisions might have to be taken inside the country as far as the farmers were concerned.

If it was possible to live with crossbred prices not much higher than were currently being received, then they would see big improvements in the carpet field in the tufted sector and in developments like rubber backing of wool. New methods of wool processing, he said, would remove some of the disadvantages of wool and with modern machinery evenness of the fibre was no longer so necessary. It was possible that wool would even win back some of the markets that it had lost. Mr Plummer said that he would not be in the least worried if the stock pile of wool belonging to the Wool Commission was held for two or three years. None of it should be sold if there was any danger of it upsetting the disposal of the current clip. He said he would like to see it fed on to the market quietly, even if it was spread over the next three to five years, and it would be to the good if it had a steadying influence on the market. Mr Plummer said that he also felt that encouragement had to be given to the maxi-

Referring to the British Government’s proposal for cheese exporters to voluntarily limit the quantities they will put on the British market, Mr Plummer said he felt that at present the only safe course open to New Zealand was to accept a quota for cheese and to fill it and play a full part in the share of the market that it had.

This, of course, did not mean that New Zealand should not try to do all that it could to develop further markets in Japan, the East and other areas and to diversify production itself. One way in which the industry could help to overcome its problems was by producing specialised products for special markets. There was no question that given the same promotion many markets could be created or developed for a particular product.

mum possible development of processing of wool in New Zealand. He believed that a lot of useful carpet yarns could be produced for which there would be a market. Apart from the need for consistency of product, Mr Plummer said that such products would need right of entry into markets and would also have to surmount tariffs. He believed that there was a good market for crossbred wool products on the west coast of America, but as wool was converted into a yarn it had a substantial duty to climb over. There was also a big field in the East for crossbred carpet yarns in areas like Hong Kong, and if these were provided in the right qualities and at the right prices they would be very suitable for that trade.

But if at present processing of wool into tops and yarns was developed in New Zealand there would be a shortage of the strong, hard, coarse fibre that the carpet

trade held was necessary to go into a blend. Drysdale or Scottish Blackface or artificial fibre were needed. The Drysdale was excellent, but there were not nearly enough coarse crutchings and if only some Scottish Blackface sheep could be imported, although he was not an advocate of that course, very soon sufficient of that wool could be grown for the carpet trade.

On meat, Mr Plummer said he believed it was necessary to keep the British market well supplied with lamb and to maintain standards of quality and grading. From discussion he had had with a cross section of people in Britain, the feeling was that Britain would not enter the Common Market before 1972 or 1973. But whether Britain went in sooner or later, Mr Plummer said he believed the best hope for New Zealand was a phasing out of the existing good arrangement that New Zealand had with Britain covering meat. It would be useful for New Zealand, he said, if a market for lamb could be developed in one of the countries in the E.E.C. before British entry. He thought that Italy could be a possibility for this. If this could be done it could result in New Zealand getting better treatment and better arrangements if there was someone in the market with a demand for this country’s produce. He believed that it might be done at the same time as a trade in lamb, as yet small, was being built up in Greece. In Canada and the United States, Mr Plummer said, he felt that marketing of lamb there should continue to be carried on by the Meat Export Development Company. “I think that there are terrific prospects for our lamb in both countries and I think we must go on putting lamb on to that market in quantities that can readily be sold at reasonably good prices. We are now getting a much better price than last year and more than two years ago.” As well, every effort should also be made to develop the smaller markets on which it was also profitable to sell lamb.

In his view money that had been spent in Japan in developing a market for ewe mutton had been well spent, but now the emphasis had to be moved to lamb. And although at the outset it might not be very profitable, lamb should be sold in this market in a boned form. Prospects for beef looked to be good, but in many markets the demand was for particular cuts few

countries would take a whole carcase—and in many areas where beef was eaten they were unable to pay the price. Asked whether meat exporting companies might not be allowed to operate alongside the Development Company in North America, he said that such a proposition had been put up, but there were some dangers in it in so far as supplies and prices in particular areas were concerned, although it was assumed that such companies would operate fairly. To another questioner, Mr Plummer said that there was a need for more people in New Zealand, particularly young people, who had a background of training for marketing. In some cases trade commissioners were also insufficiently trained in the background to primary products, he said, but some were very good and well versed in this field.

In increasing production, Mr Plummer said, farmers had to watch very closely that it was profitable production. He said that in the wool industry, and also In shipping, there was room for streamlining to save costs.

On the economy as a whole, Mr Plummer said that it was not well balanced in its dependence on too few exportable products, but this was a position that would only be corrected slowly, and while he did not support an uneconomic protected industry, he felt that they had to support industry that was competitive in export markets.

An industry that supplied the domestic market had the opportunity to become more efficient and get its costs down when it enjoyed the benefits of a five to 10 times bigger market such as could only be offered by export markets.