Sober Outlook For Farm Produce

Press, Volume CX, Issue 32381, 21 August 1970, Page 15

Sober Outlook For Farm Produce

A fairly sober outlook for farm products in the coming year was taken by the advisers to the Lauriston Farm Improvement Club, Messrs T. C. Naish and C. O. Bridgeman, when they reported to the annual meeting of the club last week. Beef: “With the closing of all shipments of New Zealand beef across the American border and the cancellation by Canada of shipment of beef from New Zealand (this is to be permitted again from early next month) the beef picture for this coming season would appear most unstable,” say the two men.

“It looks definite that this back door avenue is shut to New Zealand beef. The Americans may re-open it but only for Canadian beef, which could lead to Canada importing beef from overseas for her own supply. This would mean that New Zealand would be on a quota restriction. “With large quantities of beef on ship and in store, the Canadian market for New Zealand seems remote for the next 12 months. “Therefore we are faced with selling *X’ number of tons of beef outside this profitable market. This will necessitate the finding of new markets which could lead to an overall suppression in beef prices to the New Zealand fanner. “It is considered that we will hold our small portion of the American market, but this will not be sufficient to hold prices at today’s level “It is our opinion that the mixed farmer speculating in a small number of cattle is wasting his time and money, and may in fact be taking a grave risk. “We would add, however, that running cattle on a large scale at high stocking rates per acre, with its low running costs in labour and machinery, could have a profitable long-term future. “A caution would be that 'dealing* in cattle is only for the experienced and stability will be achieved only on self-supporting enterprises running cows and selling weaners or all surplus cattle in works condition.” Lamb: “The overall picture here again would tend to be somewhat cloudy. The opinion is that New Zealand may not be given any special rights for its products should Britain go into the Common Market and that food prices under the E.E.C. will be higher than present levels. Prices for New Zealand lamb under a quota system would tend to be higher and with the overall

price increase there could tend to be resistance to price and a decline in demand. “The percentage of diversification required of meat works this season is uncertain. It appears that freezing companies will have to increase standards of hygiene and that means more capital expenditure. At the same time losses have been incurred by freezing companies for the period from February to May. From this it can be assessed that a small premium may be payable on early lambs, but with the capital expenditure and wage increases facing the freezing industry it could be expected that the schedule pay-out to farmers overall will be lower than last season.” Ewe Prices At Works: “Prices paid to farmers for this coming season will again depend solely on competition from Russia and Japan. “The banning of the entry of Australian meat into the United States in the past few months has caused a considerable carry-over of last season’s ewe mutton. At present there seems little or no demand for this product due to the abundance of cheap Australian meat “It is considered that prices for fat ewes for this coming season will be lower.” Wool: “The situation here is chronic, with little prospect for increases in prices for the coming season. It must be emphasised that we are stuck with this byproduct so it is essential that we present it in its top form and condition.” Cropping: “Here the short run prospects look favourable for this coming season. Wheat acreage is up, as is the Arawa acreage, and this increase in Arawa may be the answer to the release of new 1020,01 ...” Finance: “Land values within the county are still spiralling with little or no regard to productive earn-

ing capacity, i . . However due to the county’s ability to diversify between farming products, purchase of land on the whole is gilt edged. "Finance is becoming more and more difficult, with the projected position that finance for purchase of land for the next year will be. tight The situation is due to high land values, reduced farmer returns and private investors investing elsewhere. “Responsibility for part of this financial climate must be levelled at the farming community, as during the past year they have publicised reduced income returns and climatic problems on their properties. For the community to lend they must have faith in the environment “Farmers must watch their current account positions and evaluate all capital expenditure on and off the farm,” said Messrs Naish and Bridgeman. “In this last year the industry has been beset by many challenges, including droughts and rising costs,” said the club chairman, Mr G. D. Kelly. “Forward planning has been further complicated by the future of some markets being somewhat clouded. “These challenges have brought out the best in both the members and advisers and their combined efforts have made the year a rewarding one in most cases, as challenges successfully met and handled give a great deal of satisfaction to all concerned. “It is a pleasure to find among club members an attitude of quiet confidence and competence to deal with their present and future business problems. This attitude of managing within the framework of existing circumstances is a reflection of the worth of the club and its advisers. This makes participation in farming a most rewarding and stimulating way of life.”