TIMBER PRICES

Evening Post, Volume CXI, Issue 72, 26 March 1931, Page 14

TIMBER PRICES

DRASTIC REDUCTIONS

STABILISING THE MARKET

MILLEES' LOSSES

Drastic reductions in timber prices averaging about CO per cent, off recently prevailing list rates wero decided upon at a largely-attended meeting of. country sawmillers held at Hamilton yesterday. Immediate effect will bi» given to the reductions which, it is stated, will bring tlio average prices to a. figure substantially below the cost of production. In a statement to "The Post" to-day, Mr. Arthur Seed, secretary of the Dominion Federated Sawmillers' Association, explained that the reduction in, prices was decided upon as a somewhat' drastic measure to try and bring about' some reasonable stability in the timber, market. "Though very little publicity has been given to the fact, the sawniilling industry of the Dominion is probably, the hardest hit of all industries as a result of the prevailing depression,'' said Mr. Seed, "for oi! recent months the demand for timber has practically; ceased, and this has taken place most acutely during only the last three or four months. Normally the sawmilling industry employs some nine or tea thousand men, but at the present time it is very doubtful whether one-quarter of this number arc retained at the mills and at the logging camps, and these few are working shore time —in some instances, only one or two days a week. This state of affairs naturally contributes materially to the unemployment situation. "With the acutely falling demand there was necessarily a tendency towards a, general decline in prices, as force of economic circumstances compelled efforts towards realisation of excessive stocks. The result has accentuated the declined demand owing to the fact that timber merchants and other users of timber will not purchase for stock on a declining market. Hence it was felt that, to arrest this decline, it was necessary to declare a drastic cut in. list prices, though such course, entails very considerable loss and hardship on the millers themselves. It is anticipated that this will stabilise the market and stimulate demand at least to an extent that will permit the liquidation of part of the excessive stocks that have accumulated at the country mills. NOT OF LONG DURATION. It is considered that the low prices now announced cannot be of very long duration, as it can hardly; be expected that many "millers will be able to continue producing at the heavy loss entailed; for already the -decline in demand and greatly re. duced turnover have strained tha . financial resources of most milling concerns almost to the limit. "As an example of what the reduced list means, it is only necessary to give example of the price of building^ A!1 grade scantlings in ordinary rimuy which is now 12s per 100 superficial feet at mill price point, or 18s (3d delivered on trucks, "Wellington, as compared with 15s Gd and 21s 3d respectively ia 1929. In the higher grade timbers the differences in prices are considerably; greater. In the foregoing instance it will bo noted that the freight charge is considerably more than half the miller's price for the timber, and represents materially more than one-third of the cost to the wholesale buyer in. Wellington. This is a fact which is generally overlooked or ignored when, prices of timber to the retail user are the subject of discussion." OUTPUT AT MINIMUM. To illustrate how hard-hit is the sawmilling industry at the present time, Mr. Seed concluded by saying that the actual sales for February of one largo group of mills on the West Coast represented only ten per cent, of normal production, and the sales from the main group of mills in the North Island for the same month represented under 20 per cent, of normal production. This state of affairs made it imperative that some drastic action should be taken to stabilise the market and -' stimulate greater consumption, for any further contraction of output would simply, mean that the industry would have to cease completely.