Trading in beef

Press, Volume CXIV, Issue 33534, 15 May 1974, Page 12

Trading in beef

Allowing the Meat Board to trade in beef is a sensible precautionary step. The board will now be able, if beef prices overseas continue to decline, to protect New Zealand beef producers more effectively than it could simply by making deficiency payments from the Meat Industry Reserve Fund when the schedule prices for beef fall below the level at which the farmers would get a reasonable return. Without such protection, the confidence of New’ Zealand fanners in cattle raising might be seriously impaired. It is not in the country’s long-term interest to allow a major primary producing industry to be disrupted by what is expected to be merely a short-term drop in overseas prices.

The step is no new departure, for in 1971 the board sought and exercised the right to buy and sell lamb because it estimated that the schedule prices being offered were low in relation to expected returns overseas. There is less reason to be confident now that beef prices will begin to rise again in the near future, but the Government has undertaken to issue an Order-in-Council which will extend the pow'ers in the 1971 act to enable the board to trade in beef as well as lamb. A prolonged depression in world beef prices might embarrass the board if it does choose to trade in beef; but a prolonged depression of schedule prices would be ruinous to many meat producers.