Too soon to judge new sheepmeat regime

Press, 28 November 1980, Page 16

Too soon to judge new sheepmeat regime

The managing director designate of lowers and Company Ltd. Mr G. K. Forshaw, last week warned against New Zealanders taking an unduly pessimistic view of the effects of the recent introduction of the sheep meat regulations in the European Economic Community, including Britain, on the British market for New Zealand lamb.

It-., is, of course, .-now well known how following the implernentarion of'the regulations there has been a big influx of home-pro-duced lamb on the market, resulting in a marked decline in prices and a much reduced market for the New Zealand product. Waitaki New Zealand Refrigerating, Ltd, Southland Frozen Meat and Hawke’s Bay Farmers’ Cooperative are involved in Towers, which markets Nev- Zealand meat in the United Kingdom and Continental Europe, including the Mediterranean area. Mr Forshaw said that, the new regulations had been working for only a little more than a month now and to base judgment on them now, for even the medium term, would seem to be a little premature. After another two months have passed, he considers that it may b® possible to make a more considered judgment.

“I think that the market in January and February will be better than it Is today, but the difficult thing is, of course, to say how much better it will be then,” he said.

He think? that with the supply of English lamb falling off, the first six months of the new season for New Zealand lamb in Britain should see a market near to normal. Beyond that, when British lamb once again comes on the market, is more difficult to visualise, but he says that there is every indication that there is an incentive for the United Kingdom farmer to increase production of sheep meat so long as the present system (of support for him) remains unchanged, but it is known in the community that systems do not always remain unchanged. Referring to the immediate effects that the regu« lations have had on the British market following their implementation, Mr Forshaw said that farmers in Britain had.known that they would be getting <' higher return when they came into force on October 20 — about an extra 7p per lb —so there were not ’ many prizes far anyone having their stock slaughtered on October 19. Now there was no incentive for. the British farmer to retain stock on his farm, for he understood that the new guarantee system provided for payments only up to a weight of about 21kg, sothat had produced a “bunching" situation with supplies coming on the market. It was a case then of working through those supplies and if they could not be sold at 42p per lb then they had: to, try at 35p and so on until they had used them all. While the , problem tended to be a short term one, he said that there were certain concerns about the United Kingdom market in the next year. There was no upper limit on the amount of guarantee that the farmer could receive. The price per lb that he was at present guaranteed was about 74p and as the scheme operated at the moment he received that whether lamb was setting on the market at 74p or 4p. Mr Forshaw said he could not see the community footing the bill but that was what was happening at present Also under the regulations English lamb should be able to go to France at certain times of the year — provided the French applied the rules properlv- . On, the other hand, Mr Forshaw said that Britain and the community were not 100 per cent self-suf-

ficlent-in sheep meats, .so people who suggested that New Zealand would be losing Its market for lamb in Britain for ever -were over-reacting. • Over many years the l British public had .developed confidence in the New. Zealand product and a habit of- eating it and provided the quality and consistency of it was maintained there would be a sale for New Zealand lamb there for a long time to come;

Whether, however, the British market would be au good as other markets in whtit it was prepared to pay remained to be teen and would be influenced by many factors, but Mr. Forshaw noted that New Zealand had gone to a great deal of trouble to obtain access to the community and it would! seem a pity if iw shipments were very much smaller. In terms of other markets he said It would be necessary to consider matters such as security andl the political risks as well as the economic gains. It was also probably necessary for New Zea-

land to change its thinkaway from the United Kingdom market solely, to the community market as. a whole. It could be that next year some other parts of the communitycould offer more tive markets thin the United Kingdom, so thatover all the return from *• the E.EC. could end up. being quite satisfactory. There could be a potential market next year in Germany. Greece —■ •an _ important market for New.' Zealand lamb in some seasons in the past would be coming into the community on January .1. — and Italy was a sub- * stantial market for New, Zealand lamb. In the past, Mr Forshaw said he believed, that manv people had tended to talk about the problem? of the community. rather than the opportunities that it also provided. “I think that we will be very much In business in New Zealand lamb in the United Kingdom and the European Economic Com, munity In a year from now,” said Mr Forshaw, in concluding on an optimistic note.