Forecast of fall in farm production and prices

Press, Volume CXIV, Issue 33446, 30 January 1974, Page 24

Forecast of fall in farm production and prices

(New Zealand Press Association)

WELLINGTON, January 28.

A reasonably satisfactory outlook for farmers is indicated in the quarterly situation re-: port by the Economics Division of the Ministry of Agriculture.

However, it says, the un-j certain international situ-' ation could affect export prices, and a general reduc-, tion in farm output is likely. !

According to the report:—| Factory-supply dairy farmers can expect an 8 to 10 per cent increase on last year’s average total payout. Wool prices are down 5 per cent since the beginning

of the season and the trend could continue. Prices for New Zealand lamb are expected to ease from their recent record : levels.

The schedules for G.A.Q. steer and heifer beef and for prime ewe mutton are lower than at this time last year. This season’s lamb kill isl 1.4 m (15.8 per cent) be-| hind last year’s kill at I the same date. Calf, cattle and pig slaughterings are below yearearlier levels, and” the adult sheep kill is expected to fall behind over the next few weeks.

Stock growth rates have fallen off and average weights in many instances are lower than at the same time last year. As far as dairy exports are concerned, the division reports that markets outside Britain are extremely good and prices are rising. But milk production is down, particularly in Northland, because of the dry season, and supplies will be in-, sufficient to take full advantage of the market situation* U.S. TRENDS The stronger United States ■ dollar and the additional American cheese quota have!

lifted export earnings, and the formal objections of United States milk producers to the increased quota are I not expected to affect New Zealand. ; Half the 1973-74 wool clip has already been sold, but speculation about the effects of the oil situation on the textile industry lead econom■ists to conclude that al- | though New Zealand will re- ■ tain its markets, wool prices ‘may be less favourable because of increased freight costs.

The division’s figures also suggest a moderate decline in meat production this season, reversing the continuous upward trend since 1965. U.K. TROUBLES Higher unemployment in Britain and smaller pay packets for many workers, an expected increase in meat supplies in Britain, and the weakening of sterling could affect further the price for New Zealand lamb.

Exporters expect less buoyant trading conditions for February, March and April.

United States beef prices are expected to firm in the short term but, according to the report, the United States Department of Agriculture forecasts prices will ease ini jthe second half of the year as considerably more cattle, 'come forward for slaughter.

Lower mutton prices are predicted because of the deteriorating Japanese economic situation, an effective: devaluation of the yen, and higher freight rates, although these will be offset somewhat by new markets in Iran, Peru and Jugoslavia. The division reports that continuing hot, dry weather; is a source of particular concern for primary pro-' ducers. Some North Island; districts face their third successive drought, and Canter-; bury is facing its sixth.