The Press TUESDAY, FEBRUARY 25, 1975. The price of beef

Press, Volume CXV, Issue 33777, 25 February 1975, Page 16

The Press TUESDAY, FEBRUARY 25, 1975. The price of beef

The Meat Board’s decision to recommend to the Government that farmers should be paid higher prices for cattle killed for export in the remainder of the present export killing season is not an unexpected adjustment of policy. Prices under a schedule guaranteed by the board are miserably low for farmers at present — about 34c to 46c a kilogram lower than those ruling at the beginning of last year. Producers, particularly the farmers in the North island where most of the country’s beef is grown, have been urging for some time that prices should be raised before next October when the board will guarantee higher minimum prices for the next export killing season. Although the minimum prices set for next season are well below those received during the boom for beef, they are very attractive when compared with present prices. Perhaps the board thinks it should have fixed a lower level of prices for next season, which might have been extended over a longer period if necessary: but since it has announced them, and since farmers have begun to plan their operations accordingly, the board has rightly affirmed that the prices will stand. However, the repercussions of the board’s plan for next season are now forcing it to recommend action in this season as well. This is an interesting example of the pitfalls that must be faced when some authority intervenes in the market — no matter how well meant the intrusion may be. Farmers who are not forced by financial strain to quit cattle m the near future are now seeking to hold on to them for sale when the new season starts and when better prices are certain. This is no more than prudent management on their part. In Canterbury, at least, plentiful supplies of feed are helping them to effect their plans. Freezing works are receiving many fewer than the numbers of cattle normally presented for slaughter at this time of the year: instead, they have abnormally heavy bookings for killing cattle in October and later. Supplies of cattle for the local market may dwindle, and retail prices may rise as the trade has to pay more to buy stock. Such a rise on the local market is not likely to release much extra stock from the farms — for the beef farmers will see that the extra supply would defeat their purposes. The Meat Board’s recommendation to the Government that prices to the farmer be raised may be seen not only as a further form of aid to the fanner, but also as a method of getting the flow of cattle going again for the benefit of the freezing industry and of the local consumer. Whatever happens, the local consumer will have to pay more for beef: a rise in the prices paid for cattle for export will not improve the local supply. The Government will probably treat the board’s request as a further step in stabilising farmers incomes, complementing the aid to sheepfarmers announced last month. Later, when prices for farm produce rise again on overseas markets, the Government can be expected to seek to recover these assistance funds. Although the Minister of Agriculture and Fisheries (Mr Moyle) has said that any farm stabilisation scheme must be calculated to suit the conditions of the market, the statement of such a goal is easier than its achievement. The signs on, the local sheep market are already that, as farmers are assured of minimum prices for lamb and wool this season and next, the effect of overseas prices is becoming a matter of academic interest on the domestic market