IMPERIAL BUYING

Evening Post, Volume C, Issue 38, 13 August 1920, Page 10

IMPERIAL BUYING

WOOL AND MEAT

BUSINESS IN NEW ZEALAND

STABILISATION OF FINANCE.

It is no wonder that the Prime Minister; and bankers have expressed some regret at the termination of Imperial Government purchases of New Zealand produce. The amount pitid out to 31st /July for wool, meat, arid butter and. cheese totalled over £140,000,000. This was not all. The big business was.practically a spot cash transaction. There have been no fluctuations' of markets to worry about, a.nd stability of finance has been eneured.

The report' of the Imperial Supplies Department just presented to Parliament affords an insight into this big business.

Frozen meat was the first commodity to be shipped on Imperial^ Government account as from March,' 1915. The report shows that as at 31st March, 1920, the total quantities of meat purchased and shipped since 3rd March, 1915, was : Beef, 2,885,043 quartere; mutton and lanib and other meats, 26,2H>061 car; cases; and the amount paid for it to that date was £44,344,503. The largest payment mad© to any disti-ict was to Wellington, the largest contributor, viz.',' £13,252.319, and Canterbury was second with £9,845,052. This included storage charges.. There were only 18,829 quarters of beef, 106,260 carcases mutton, and 91,080 lost in transit. The Germans accounted for much (of it in the sinkings of the Clan M'Tavish, Rotorua, and Hurunui.* '', There were. 6,628,789 carcases (60 pounds) of meat in store on 31st March last. Since the Government purchase, the storage. capacity of freezing works has been increased by 313,095 carcases, and now totals 7,718,367 carcases, of which 5,089,656 , carcases are "North Island stores and 2,628,711 South Island stores. The meat has been purI chase at one price since October, 1916. DAIRY PRODUCE. , When cheese was first purchased! it was for broops, arid a,bout one-third of the exportable 'surplus, was first bought. For the seiasons 1916-17 to 1919-20 the whole of the exportable surplus was purchased. Prices at first were 7^d f.0.b., then-9id,: then lOd, and, finally, IOJd, for, first grade. Good expedition has this season been displayed in getting cheese a,way from the Dominion. Butter-,was at first purchased; at a contract price of 157^ per cwt.with a share ! in 'profits made by the British Government on its sales. It was thought by many, when this was made, that these profits 'would be negligible. They were anything but that. They realised an , extra 17s pel" cwfc, and brought the. return, to the producer up to 174s per cwt. Next season there was no share in the profits, but a straightout price was fixed and agreed to. It was 181s f.o.b! for first grade.' ' . '

Then dissatisfaction jwas expressed, by. Naw Zealand producers. Not at first so imicli as with 181s, .but at the> fact that more money was being paid! by the British Government to foreigners for their butter thari was being paid to the New -Zealand producer. Subsequently English, Welsh, and Iris;h butter makers were left free to obtain finy" price the market ( would stand, while the Naw Zealand producer could , only look on with his butter bought at 181s per cwt, and see Etaglish and Irish butter retailing at 5s | toss 6d por pound. More than this was obtained for such* "free" or decontrolled! butter in localities where wages were high and were freely 1 spent. This 'disability suffered „by the New Zealand producer hardened him into insisting for this coining season on a free market for hi? butter. At the time of writing that is the position; but negotiations are in train for a further contract to sell to the' Imperial Government if terms are mutually agreed upon. The price in that event would probably'be somewhere about 240s per cwt. '■ . i . . . /

THE BILL FOE WOOL.; ' The largest purchase of any onf commodity was that of wool, all sold to the British Government To 31st July, nearly £60,700,(300. had been paid out on account 1 of wool (greasy aid' slipe) and sheepskins. That is. not, all, for the grower will have coming to .him profits to 31st March, 1919, on the sale of wool by. the British Government, £1,619,000, and profits (not yet estimated) for sales of wool from then onwards to;th© termination of the whole business.

The Imperial Government ordered shipments of wool totalling 140,331 bales to go to the Governments of France, Canada, and the Ijnited States, and the prices foi this wool were arranged by the Imperial Government. Local woollen mills were; provided for. To 30tb June they have purchased 81,572 bales. . Their average prices for the four past seasons were: 13.88 d per pound, 15.67 d', 16.38 d, and 17._33d, in order of time. The average prices realised by sale to the Imperial Government exclusively clip by clip,' in order of time, were: 14.77 d per pound, 14.92 d, 15.21 d, and 15.35 d., This takes no' account, of course, of the profits already referred to. .The^rice per bale of average weight for the Dominion for last clip (including purchases of local woollen mills) was£23 0s lOd per bale of 3581b. y ■ ... •There has been a good deal ot work put into the hands of New Zealand wool scourers and fellmongers under the Imperial purchase scheme. ' For the 1918-19 season 121,064 bales of wool were scoured, reduced from an average greasy weight of 37,4211b per. bale to 297.701b scoured weight. The loss of weight by scouring was 66.27 per cent. The payment for treatment of this wool was £213.369, of which 75 to 80 per cent, ■would have been paid out for labour. There.was £116,204 paid for fellmonger ing, and of this some 75 per cent, would also go for labour.

\' SHIPPING. Wool-growers x may remember that early in the selling season of 1916 buyers attended the local sales as usual; but while they were prepared to operate they were not willing %o pay "prompt" for the wool, i.e., within 14 "days of the fall of the hammer. They 1 had a- sound reason for this, for it was useless for them to pay for the wool with ho prospect of prompt shipment, and every prospect of interest, storage, and insurance charges accumulating if the produce was detained in, New Zealand for want of tonnage. Then the Imperial purchase was effected.' The difficulty was removed; buyers became Government appraisers; sales took tho form of valuations. ; ,

But the shipping difficulty was a very real one. / It* 1 led to congestion of the stores. Not only with wool, but with meat, cheese, and butter, for at the end of, July, there were 465,000 bales of wool in store, 5,727,000 carcases of meat (for which no shipping space had been allo.cated), 188,900 crates of cheese, and 89,500' boxes of butter. All charges for storage and all risks of fire, and all possible loss by deterioration -were the responsibility of the Imperial Government (not of .the producer) on this valuable produce.

Had there been no war there: would have been ample tonnage to have lifted all this as cargo. But there was a war, there were not the ships available, and still the produce poured in as usual, and iw usual tho producer, through the good offices of the Imperial Supplies Depart-

ment, was able to turn it into cash almost as soon as he delivered it into store.

Shipping tonnage went down to 52 steamers in 1918, but rose to 79 steamers in 1919; and the produce is getting away with.remarkable celerity, all things considered. There is likely to be not more than' 2,500,000 carcases of meat, nor more' than 300,000 balesaf wool on Imperial Government account held in the stores of the Dominion on 31st December next. A little relief is being afford- I ed by shipments of lamb to; New York and elsewhere in the United Slates. Acknowledgment is made in the report of the valuable work of the Oversea* Shipowners' Committee. . . Hid PER £100. This (enormous turnover, involving expenditure to 31sh March, 1920, of £133.----091,240'(£143,677,205 to 51st July, 1920) has been done at a total cost of £63,497, covering salaries, office expenses, rents, and all other charges connected with internal administration. It works out in relation .to the total disbursements at approximately ll^d per £100 of business. This requires "no comment. Some of tho business done by the Imperial Supplies Department was exclusively on account of the Dominion Government.