Sheep industry in good heart

Press, 31 August 1977, Page 29

Sheep industry in good heart

DOUG FYFE

The sheep industry m Nevv Zealand today is tn pretty good heart. I And as well as being I New Zealand’s number one industry, it is also Canterbury’s, with the Canterbury 'statistical area having more sheep than any other ir. the country. Sheepfarmers have had two good years, and price: for their prod cts in the lasi year in particular have beer far better than anyoni could have dared to hope i year ago. It seemed that Professoi j B. P. Philpott, a director oil the Wool Marketing Corp ! oration, was something of ar optimist when he predicted | in August last year that I the average wool price fol! the season, just then begin ing. might be about 200 c or better. In fact the average for wool sold at auction was

e almost 220 c per kilogram, r which was an improvement of o about 40 per cent on the y previous season. t Prices, too, for lamb meat > and ewe mutton have been remarkably good, and the chairman of the Meat Board r|Mr Charles Hilgendorf. spoke i in March of total receipts foi iimeat and its bv-products 3 in the current season run-

ilning close to SIOOOM. In the 1 year from April last year "Ito April this vear the' i‘exceeded 8800 M. J In the season now drawing to a close the average return tor a lamb, including pelt and wool, was around $l3, which is good in comparison with resent experience. Certainly markets for heel; have not been so good, with the recession in this industry ! continuing in spite of hopeful' forecasts for a recovery at i some uncertain point in the future, but in New Zealand! floor price and price smooth mg mechanisms have shielded producers to some extent from the worst effects of the downturn, and where of course cattle and sheep are run in conjunction, which! is a common enough) situation, the one has tended! to counterbalance the other, j And if the recovery ini sheep product prices has tended to turn the spotlight; away from cropping on those! farms that lend themselves! to that activity as well asli stock farming, the benefits!) that it has conferred in the); past on these enterprises!; when stock prices were lowerl< and vyill continue to do in the I: future cannotJie overlooked, t

■ In the more specialised (areas of farming like potato and pig production the climate at the moment is not oo good, but assuming again (that meat and wool produc- , ion are the mainstream !, if farming in Canterbury then the industry in general , is in a fairly happy state. ’ One thing that has to be ' borne in mind about farming s that it is a dynamic hing and constantly changng. Two years ago the outook was very depressing. j in the last two seasons, towever, in the sheep indusry anyway there has been t welcome recovery but it would be an optimist indeed ■vho would expect things now o remain that way. i It is no easy job predicting he course of markets. There | ire so many imponderables I 'hat the experts are frequently found wanting. By I he end of the most recent i vool season prices had eased | back quite a lot from the! seasonal peak. The hope is I hat the begining of the new season will see prices no iower than at the closing of he old season, and while jver-all prices in the new , season are not expected to i reach the levels of last sea- i son, there is some optimism i that they may not be too far ; behind — perhaps only 10 i per cent. s For lamb, too, the picture is not undulv pessimistic, c While of late the United ( Kingdom market has not \ exactly given cause for great t optimism, there has been a 1 oromising inquiry from other r markets like the Middle s East and North America f which could add up to a j reasonably good market. c For beef. the market

r (could be better than in the past season because one of these clays the heavy killings > | that have been going on in J the United States now for 1 (quite a long time are ex.jpected to peter out, and then I i(in upturn in the market for imported beef can be exI pected. II Taking an over-all view, Ihowever. it would be surprising if sheep farmers were i to do as well in the coming (season as in that now ending Today farmers need to receive good prices for their produce. Their costs seem to rise in times good and bad and they :>re frequently attributable to interna) pressures for higher wages. (When prices fall, in spite of (the mechanisms that now (exist to ease these, they (inevitably feel the cool winds jof lower prices and higher costs. Theirs are no cost-plus (markets. i Io emphasise the point, i ( just consider calculations that i indicate that the cost of get- i (ting a lamb -from the farm ; (gate in New Zealand to 1 (Smithfield market was re ! 'cently more than $l4. These 1 (sort of costs can only be sus- i tained when prices are high, i

d There have been disturbing o forecasts that the dpv could ( ecome when the costs of get-] tjting a lamb to market would ! a (be so high it would no longer! -I be an economic proposition to; njsend a lamb to Britain. The I y implications of this are! 1! serious indeed. To add to these problems I e there are those of access to I 4 markets and in particular the 4 big European market, of I - which readers will be only! - too well aware. It has been! . fairly said that no one owes) . New Zealand a living, but it j - seems just a little unfair that j i a small country that is one! t of the most efficient proI ducers of agricultural products in the world should be; denied access to markets! ! thousands of miles away on| ' which it can compete on morel than even terms with the local producers. However a lesson of farm- I ing experience is that things; (are seldom as bad or as good' Ins they seem, and today the! jsheep industry is again in an] expansionist mood. A survey of many hundreds of farmers i done by Mr John Pryde, a I research fellow in agricultural policy at Lincoln College, has shown that farmers are tending to add to their flocks and are spending more money on all those things on their farms which will add to production in the future. While there has been much criticism of the present Government in farming as well as other circles, it has to be recognised that it has been gradually implementing ( policies that are helping to j stimulate the expansion of j farm production that is hap- > pening anyway in the wake; of better earnings. The livestock incentive >

schemchas been a valuable stimulus and has the virtue of linking financial assistance with specific increases in stock numbers on the basis (of thought-out programmes of ;development that take into ' iccount good stock performance. And in the Budget it; has further liberalised this! scheme to hopefully attract i more farmers into it. The settling of more than! 1000 new farmers on farms in I the past year is also a not

inconsiderable achievement, and if it is assumed that many of these are young men then it can be expected that they will produce more than hose that they have replaced because of youthful enthusiasm, the need to service a high level of indebtedness and also the advantages of better educational opportunities. The end result of all this is a greater volume of production and hopefully export earnings, particularly when it is coupled with a growing awareness that numbers alone are not the only criterion for Increased production and that more wool per head and higher lambing percentages are as much, if not more important.