SLUMP YEAR

Evening Star, Issue 20863, 5 August 1931, Page 2

SLUMP YEAR

REVIEW OF FARM AHD TRADE COHOITiOMS Mr A. C. Cameron, president of the Dunedin Chamber of Commerce,' furnishes the following review of farming and trade conditions in Otago for the year ended J uuo last: — The year just concluded will stand out as one of the most difficult in the history of the dominion. The extraordinary world slump in primary produce and its resultant effect upon farming and trading conditions in New Zealand has been the outstanding feature of the year. In many cases farmers and business men have found themselves unable to carry on, and many more are putting up a plucky fight to keep going in the hopes of a gradual improvement in primary produce and in business conditions generally. The great bulk of farmers in this country' have either had to eat into their capital or loan upon their mortgagees, bankers, or stock agents. The serious slump in prices has been such as to make it difficult, and in many cases impossible, for farmers to pay working expenses, rates, rent, and/or interest. Many thrifty farmers have come to the conclusion that their previous policy of putting all profits over and’above living expenses into improvements, reducing mortgage, etc., has been wrong, and that it would have been better to have invested a certain amount in securities, which would bo readily convertible into, cash, and could at a time like the present save them temporary embarrassment. SHEEP FARMING. The sheep farmer has been most heavily affected by the slump, as tho following figures for wool sold at Dunedin wool sales will indicate;—

Fortunately we have reason to bo thankful that comparatively little of our sheep country changed bands during the post-war boom period. However, the above figures will indicate how hard it will go with those who bought during those years or who paid excessive goodwills on Crown leases. It is fortunate that production has increased tremendously during recent years, mainly owing to top-dressing, clearing out rabbits, tho adoption ot more scientific methods, and irrigation, so that Otago has not felt tho full force of tho slump to the extent of other sheep farming provinces. The following figures dealing witli the number of sheep and quantity of wool in Otago will illustrate the remarkable increase in production : Sheep. Wool (lb). 1921 ... 2,782,483 16,510,066 1930 ... 4,074,223 25,369,061 Increase in nine years—--1,291,740 8,858,995 The interim figures for 1931 show’ a still further increase. DAIRYING. Generally speaking, Otago is not a dairying province, yet wo have largo districts almost entirely given up to dairying. We have ,seven butter factories, with an annual output of 2,700 tons ; of which 690 tons are exported, and nineteen cheese factories, with an annual output of 2,780 tons, of which 2,580 tons are exported. Largely owing to herd testing and improved methods of fanning our dairy farmers have managed to hold their own despite the extremely loiv prices which have been obtainable this year—prices which would have meant bankruptcy but for the herd testing, etc. The returns are so low that dairy fanners have had nothing to spend for anything but the bare necessities of existence. Few if any have been able to pay wages to sons and daughters assisting with tho work of tho farni. The following figures, showing the average price per lb paid to fanners for butter-fat, will serve to illustrate the extent to which tho Otago dairy farmer has suffered by the slump:— Butter Cheese

EXPORT OF SHEEP AND LAMBS. During the last ten years Otago’s export of sheep and lambs has steadily increased. During the killing season 1950-31 the three freezing works operating in Otago—at Burnside, Fiucgaml (near Balclutha), and Pukeun (near Oamaru)—-handled 114,229 sheep and 953,350 lambs. In addition to these, 309,095 sheep and lambs were railed into Canterbury for fattening or freezing purposes. Tiie past year has been an extremely difficult one for farmers and freezing works alike. During each of the past three seasons prices have fluctuated considerably, but the following figures showing the price per head paid for fat lambs and wethers to farmers give a fair indication of the position ;

By-products have also slumped considerably, and this lias seriously affected the prices paid by the freezing works. The following figures give some indication of the position:— PRIME MUTTON TALLOW. 1928- £33 to £34 per ton, f.o.b. 1929- Steadily falling from £32 15s to £24 per ton, f.o.b. 1930- Steadily falling from £2O 10s to £l7 per ton, f.o.b, LAMB PELTS. 1929-29—36 s 6d per dozen, f.o.b. 1929- 2Cs per dozen, f.o.b. 1930- 9s to 13s Gd per dozen, f.o.b. Other by-products have suffered even more sor.c'v.sly. Runners, for instance, are worth one-third to one-fifth of what they wore worth during the 1923-29 season. CROPPING. Otago produces a pproximatoly onccighth of the wheat output of the dominion. During tho 1929-30 season 24,516 acres were sown in wheat, which produced 834,511 bushels. Tho quality of tho wheat produced in Otago is high, and it is eagerly sought after for nulling purposes. Unfortunately during this last two years varied weather conditions have made tho lot of the wheat fanner uncertain, and, although a. payable price has boon ruling for prime milling wheat, a good deal of wheat has boon rejected for this purpose, and sold af lower prices. During tbo 1929-30 season o acreage devoted to cropping other than wheat was 204,066 acres, made up as follows: Acres. Wheat for chaff and not harvested ... 293 Oats for threshing 17,510 Oats not harvested 1,354

Oats for chaff, hay, or silage 38,402 Barley 4,046 Peas 400 Beans 1 Linseed ... ••• Other grain crops • 56 Lucerne ... 0,964 Green fodder (rape, etc.) ... 35,040 Potatoes Turnips 99,051 Mangels 1,556 Onions 4 Other crops 15 In addition to this 5,643 acres of grass wore cut for seed purposes, and 15,273 acres cut for hay or ensilage. Prices have been such as to discourage cropping other than wheat, and many fanners arc now only sowing enough for their own requirements. The heavy importations of oats and chaff from Australia has killed the trade with the North Island, and resulted in a surplus oi home-grown oats over and above local milling requirements. A very bad year lias been experienced by the potato and grass seed grower, the prices ruling being below the cost of production. FRUIT FARMING. Otago-grown fruit is second to none, and the climate in certain parts of Otago is ideal for apple and stone fruit growing. This year Otago exported 85,000 cases of apples, and, although the final results arc not yet to hand, cabled reports indicate that prices for the season will be reasonably satisfactory. BUSINESS CONDITIONS. The above few figures will give some indication why Dunedin wholesalers and retailers are feeling the absence of purchasing power from the country. It has been said that the slump is largely psychological, _ but as this review does not enter into root causes, but merely records the local position, 1 will content myself by saying that there .. nothing psychological about the absence of buying power in the country, nor in the absence of country orders in the town. Luxuiv trades such as the motor car and cycle trade, the jewellery trade, etc., bav< suffered very badly owing to the falling off of business. Drapers, tailors, etc., have had a very thin time. Stock firms financing farmers have suffered heavy losses. In many cases mortgagees have been unable to collect interest. The professions have also been hit very hard—the medical profession through the inability of many people to pay, the legal profession through the absence of conveyancing, and so on. Manufacturers have had to slacken up on production, and many businesses have had to put off employees. In Dunedin alone it is estimated that some 2,000 families are in need of relief work, food, and clothing, so it is little wonder that grocers and other tradesmen are unable to get many of their accounts paid, and that many landlords have been unable to collect rents.

Town property has dropped considerab'y ii value, mainly owing to the absence of buyers; building has been very slack, and this has reacted upon the hardware trade, indentors, etc.—classes which have been very heavily hit indeed.

The necessity to reduce stocks, possibly urgent pressure from banks to reduce overdrafts, and the desire to increase turnover, has led to intense price-cutting on the part of certain individual firms. The old-style grocer running his own store has had a stern fight for existence against the “ multiple ” shop and “ cash and carry ” newcomer.

In summing up, it can be safely said that most farmers, many tradesmen, and business people have suffered a 50 per cent, cut in incomes—many have suffered more—many have lost a lifetime’s savings. Despite the ob\ .ons seriousness of the limit - on, it is pleasing to record that both farmers and business men are in good heart, and a quiet spirit of optimism and determination to weather the slump proiails. Signs are not lacking that Ihe spirit of enterprise which animated our pioneer settlers still prevails in the province. During the year tenders have been let and new companies have been successfully launched, and, generally speaking, Dunedin business men are energetically getting their share of whatever business is being done throughout the dominion.

Wherever one journeys throughout New Zealand one hears the saying: “ Business is more solid in Dunedin than anywhere else in the dominion.” The prestige of our province is high—a prestige enhanced by the calibre of the men we have supplied to run many a business in the north. _ Let us pin our faith for the future in the ability of our Otago farmers and business men to hold their own and win through.

Season. Average price per bale. 1924-25 ... £28 9 8 1925-26 ... ... ... 17 8 7 1926-27 ... 19 11 3 1927-28 ... 26 0 2 1928-29 ... 21 19 1929-30 ... 11 5 1 1930-31 ... 8 12 9

factory factory supplier. supplier. Season. s. d. s. d. 1928-29 . .. 1 6i 1 82 1929-30 . .. 1 32 1 74 1930-31 . .. 0 11 0 11

Season. Lambs. Wethers. 1923-29 ... , 28s to 30s 27s J929-30 ... 21s to 22s 23s 12s to 14s 1930-31 .. . 11s to 16s Cel