Export uncertainty faces N.Z. farmers

Press, 22 November 1980, Page 25

Export uncertainty faces N.Z. farmers

nzpa Correspondent Washington

New Zealand farmers assessing export prospects in 1981 face anotlu year of uncertainty about trends in world markets, according to American agricultural experts who met in Washington recently.

The meat market appears ■'bullish,” with high demand and rising prices, but (there are big question-marks over developments for the dairy industry. The 19S1 agricultural outlook conference, organised by the United States Department of Agriculture, was told that world meat production would reach record levels this year, and probably increase again in 1981. •‘With rising populations and additional increases in per capita consumption, there will be continued pressure on the world’s capacity to produce meat to supply this demand,” a U.S.D.A. expert, Mr James Nix, told the conference. He said that while world beef output might rise in 1981 after slipping lower every year since 1977, a significant rise in international trade was unlikely. The trade fell substantially this year because of tight world supplies. t Mr Nix noted the effect that the Soviet Union had had on the international market. “The sharp rise in imports by the Soviet Union has provided a

much different trade pattern this year, and much uncertainty remains about future Soviet imports,” he said.

The Soviet Union has a significant buyer of New Zealand meat this year, and New Zealand managed to bring 1981 beef export figures to the United States close to last year’s levels, after a substantial early decline. New Zealand producers can expect the benefit of higher beef prices on the American market next vear — they are tipped to rise between 15 and 20 per cent — and, observers say, .will be able to sell as much as they can produce. Lamb producers might also find rising prices on the American market, but their prospects will be limited by ability to supply — if they retain their new, big markets in the Middle East — and by the fear that rapid expansion will provoke strengthened efforts for import limits bv local producers. 'The world dairy scene remains one of over-sup-ply, according to two U.S.D.A. experts, Mr Clifford Carman and Mr Bryant Wadsworth. They predicted that world butter stocks would be up eight per cent at the end of this year, while consumption would fall three per cent, and forecast another increase by the end of 1981. Cheese consumption would be up two per cent this year, leaving 1980 stocks up one . per cent. Milk powder output would be up

3.3 per cent this year, while consumption xvould fall six per cent, leaving end-of-year stocks up five per cent. None of this was good news for New Zealand, which, the two said, saw milk production rise seven per cent from June, 1979, to May, 1980. Soaring meat prices might make cheese more attractive •to consumers but Mr Carman and Mr Wadsworth said: “On the other hand, additional increase in retail dairy’ product prices, the general economic outlook of relatively high unemployment, and reduced spendable income may hold back any large gains in use.” American milk production is seen as likely to increase, with continued support buying in by the Government and increasing pressure by the dairy lobby for import restrictions on New Zealand casein.

Perhaps the biggest test for New Zealand, observers said, was whether the United States would change its policy of not exporting the butter, milk, and cheese it buys ir. The new Reagan administration has to reconsider the farm bill next vear, and its export policies are unclear. The Euronean Common Market, which has frequently exported in competition with New Zealand in the past, is also reconsidering its policies. “The future is very uncertain,” said one New Zealand official in Washington.