COST OF GROWING WOOL

Hawke's Bay Tribune, Volume XXI, Issue 14, 30 December 1930, Page 5

COST OF GROWING WOOL

LINCOLN COLLEGE RESEARCH. THE 1 OSITION IN 1930. In view of the present economic outlook for wool, aud of the assertion oft-repeated that this commodity is not to be sold profitably under Is a lb, the following summary of a report given in the “levelling Post” on the cost of growing New Zealand wool, which was recently completed by Messrs W. b. Allan and K A. Sherwin, of Lincoln College, is interesting. The reason for the report, us explained by Dr T. W. Weston, lecturer in farm economics at Canterbury College, was the fall in wool prices and tho consequent importance attaching to the solution of tnc dual problem of decreasing tho costs of production aud increasing tho demand for wool.

With sheep 30s to £1 per head, a typical cost of production of wool per lb net over the past five years, 192630. has been Is 3d per lb. The average price received over this period has Ocen Is 2jd per lb uet on the farm. Hence, in spite of various adjustment of costs consequent on the failure of the rising trend of prices from 1901 to 1925 to continue over tho past five years, 1926 to 1930, a loss has been experienced. For the year 1930, with sheep down to 15s and the price received for wool on the farm bd per lb, Is 6d per lb would be 1 required to pay all costs. In many cases receipts have not even covered working expenses alone, and farm receipts, even to holders of property wortn up to £lOO,OOO free of all debts, have not paid working costs. The present tendency appears for a downward trend of slieep prices this season, but after this season an upward trend in wool prices is anticipated. Expenses require to be consciously adjusted to those receipts by—(l) A writing down of capital values and a reduction in taxation and in working costs; (2) by working properties more extensively or, where possible, increasing gross output at a profit over working. Further fencing, enabling better grazing to l.e achieved, appears to be the chief possibility of improving output, but many properties will required to be worked much less intensively during this lowprice period.