Stiffening the lamb market

Press, 23 February 1977, Page 20

Stiffening the lamb market

Having resisted the idea for many years, the Meat Board has decided to trade in lamb on the British market. Although the board has long had the authority to be a buyer and seller of meat, it has engaged in trading only with the purpose of developing a new market—and then in association with meat companies.

Even in Britain the board will have to depend on established traders for storage if it has to buy and store meat until a more favourable price can be obtained

Although recent prices for lamb have been higher than those of a year ago, the New Zealand farmer can hardly be expected to survive the added costs of processing and shipping as well as what appear to be abnormal forces depressing the market. No amount of manipulation of the market by New Zealand can improve prices in the long run. especially when the meat market is already being managed to serve the policies of the European Economic Community.

In the short term, however, any temporary weakness on the part of the sellers of New Zealand lamb may be countered by the readiness of the board to strengthen the market. The board need not make a profit; it may risk

making a loss on reselling lamb. At least such a loss will be spread evenly among the producers in New Zealand who finance the board. After a good start to the season for selling lamb the New Zealand meat producers are probably as well attuned to the board’s decision as they would ever be.

Large meat traders are not devoted solely to New Zealand’s interests; they have other meat to sell. At times they suffer losses, too: but they are likely to balance all their transactions to achieve their own best advantage. If it can be shown that the companies and cooneratives are not trading in the best interests of New Zealand producers, the board has power to review their licence to export our meat. In theory, the board could undertake the entire export business. In practice such an undertaking would entail many risks, both commercial and political. By entering the trade to support prices, the board has at least given notice that it is ready to show its teeth. On the evidence in the British market so far, that glint of power may be all that is needed to stiffen the attitude of the sellers. Everyone in the meat business in this country can approve the merits of that, even if traders in Britain do not like it.