DOMINION’S PROSPECTS

Hawera Star, Volume LIV, 30 April 1934, Page 8

DOMINION’S PROSPECTS

BUTTER AND WOOL PRICES. SIR HAROLD BEAUCHAATP’S REVIEW. “Speaking for New Zealand, I am glad to be able to place a better position before yon than lav colleague, Mr lan Duncan., was able to do when v. visited Sydney last !yeq,r,” said Si.' Harold Beauchamp, speaking at ti t: an nual meeting of the A.M.P. So..in - Sydney. “Then, unfortunately, viewed from a financial and economic standpoint, our Dominion was distinctly in the doldrums. Towards'the em" of 1933. however, one of our chiel products, wool, commenced to improve in value, and that improvement, generally speaking, has been mainta.m d This advance in prices has had a wonderful effect upon wool growers, many of whom were in financial difficult if* before the rise in value of wool and stock ocurrcd. Tq .show what that rise means. I may cite one case. In Ili’ceinber. 1932. a leading auctioneering firm in Invercargill, sold wool u the value of £44.C00. In December 1933, that firm sold the same quantify of wool, similar in quality, and this realised £151,000. An increase of 243 per cent. In. other parts of the Do ininion there have been similar experiences. The prosperity of the sheep farmers is in no snrill measure, reefluted in the increased number of policies we wrote for 19*>3. It- is also reflected in the sale of motor-cars, and the heavy bookings of overseas passengers, who are not deterred from travelling despite the abnormally high rat.e of exchange—2s per cent.—as between Xe TV Zealand and Great Britain. Naturallv. manv or our advances to sheep farmers are in a better position to-clay. from a security 'standpoint. they were six months ago. As to frozen meat and ancillary products —tallow, pelts, runners, etc.— these met with a (rood market in 1933 and the outlook, at the moment, is on-, eouraging. * ,i- j “With regard to those engaged m, •‘-ho i of hnt+er and cheese. ; I regret that I cannot speak in an r-rC-ifnistm emrit. as" both nf those art,-, ides' are selling to-day, and have been j selling for months past, at much helowl

he cost of production. The chief cause | of our difficulties, in respect to but- j ter, is the .situation in Europe which contains the world’s largest consuming population. Since the slump, trade I -.ondit-ons in Europe have been so bad , -hat most European countries, in order 1 to keep their trade balance light, liavi been compelled to largely restrict ini ports. In this connection, butter ha; suffered severely, both from very h:gl tariffs and reductions in the quantitie: that can be imported. Eor example Germany, until comparatively recent ,y, imported from 130,009 to 140,001 tons of butter per annum. .She has now definitely limited the quantity that cal ue imported to 40,000 tons. The resul. of these high duties and restrictions A that, if the Baltic countries which ex port butter are excluded, that article, cannot bo bought retail in any Euro peari-country under approximately, tin equivalent of 2s Gd per pound Xe\ Zealand money. In Paris, it is understood, the price is the equivalent of 3; per pound New Zealand money. Umle,_ .hose circumstances, butter is beyond .he reach of a largo proportion of the European population. “In England. T may add, the retail trice is, rougVly ,8d per pound. Whei: trade conditions return to normal 1 '■annot see the consuming population, o Europe allowing this state of affairs to continue. If these European restrictions and high tariffs were removed ou" bu’tter difficulties would rapidly dis appear.- An indication of the manner in which the price factor influence.consumption, in 1928 Britain consumer onlv 151 pounds of butter per head of the population. Since thou we have had slump conditions, which one would not expect would help consnmp fion. Jn 1933. however, the consump-1 tion of butter Increased to 23 pounds oer head of the population, and m "he last two months the consumption was greater- than in the correspondin'' months of last. voar. The consumption of 24 rounds per head will probably be reached by 1934. This mean an increased consumption of 8-£ pounrs per , capita of the population in six vears | of bad times. Every pound means 20.000 ' tons. The increased consumption. I therefore, in six years is 170.000 tons.j or a great deal more than New Zea-| land’s total exports. The increase i in consumption lias been brought about | by the price factor alone. If the price

is unduly increased, it see ms. evident that consumption will full off. While the present prices are unprofitable in New Zealand, our fanners are gott.ng their costs down, and are 'learning to make more use of their dairy byproducts—.skimmed milk and whey—than they formerly did. “It is ouite conceivable that with a- return of great industrial activity interest rates .for money inlay .within the near future enhance by 20 to 25 per cent.” i ’ ’