COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LIX, Issue 162, 10 June 1939, Page 5

COMMODITY MARKETS AND PRICES.

FARMERS’ ECONOMICS

(By "l’enloo.”)

ihe part played by the fanner in the economic liie ol the community * s not as lolly realised as it. should be, and yet the farm is flic luiklulnoiital 1 actor. .It is on farm production that the wcll-beiiijr 01. tlie entire community depends. \\ e are not an .industrial country and cannot bo turned into one by Act of .Parliament. An industrial country requires t'f density of population, so that industries may have a constant How ol labour, and a "reat body of eousuinei's to absorb tlie bulk of the’ goods tommilactural. An essay could be written on this subject, but that is I unnecessary. We arc not an industrial country, and we depend upon tarm production. All know that the farmers produce a yrcafc deal more than is needed lor local consumption, and so 11 10 tanner has to depend on export. The export income of the country is based, as to fully 111) per cent, oil the overseas sale ol primary products.

Since our economic life depends upon the production of the tanners, it is common sense to suggest that the tanner should be given a square deal under all circumstances. The people in the cities and towns, too irequently overlook the fact that their very livelihood depends upon the farmer. Blit what is meant by a

square dealt' Certainly, the funnel would say, not any exceptional favours, but just an honest, square deal. •Since the farmer lias to market his produce overseas—in Britain in particular—and where produce similar to ours from other British countries is sold, the producer must accept a competitive price, ft is a well-known economic fact that where there is competition, the problem ol cost is all important, ft costs arc greater than those ol our competitors, then our iarmers arc making less profit, it should bo tlie aim to keep larming costs as low as possible, for the greater the export income the greater the prosperity of the country and the higher the standard of living. There is no politics in this, but just common-sense.

The fanners arc just now complaining seriously over rising costs and the inadequacy of farm labour. It is the duty of those resident in the cities and towns, whose livelihood is dependent upon farm production, to help the farmers obtain a reduction in costs. If something is not done, and that very soon, the positiuii will rapidly become very serious. It is already serious, for production lias already fallen, and that means loss of export income, which will fall upon the whole of the people. THE BUTTER .MARKET.

'i'lie price of New Zealand butter on tlie London market lias again advanced to 118 s after falling to as low as l.Oos. It is hardly probable that this lias been brought about by any market manipulation, but is an ordinary movement. When tlie price fell to 105 s speculators operated, and they arc probably responsible for the upward trend which gives them a good profit. The dairy industry is now faced with some difficulty. In the season ol ! 1)37-38, production declined by Gj per cent, arid for nine months of the current production year, to the end of April, there has been a further decline of 11 per cent. No doubt a part of this is due to adverse climatic conditions, but how can one account for the balance? It seems obvious that some arc giving up dairying. At the same time it is clear that guaranteed prices have not afforded the help that was necessary. The guaranteed price as all know is well above the market price, yet the farmer’s profits are" less because of rising costs. » There is another factor that will reduce the income of farmers, and that is the probability of shipping freights being raised. Tlie contract with the shipowners is .just- about to expire and they are not willing to renew on the old terms. Their contention is that since the last contract was signed work on the waterfront lias become expensive, which is no doubt true. A conference is to be held in London while the Finance Minister is there, but tlie strong probability is that freights will be raised. This will affect all farmers, and will hit the sheepfarmers more severely than the dairy farmers.

It is lint sill-prising to learn that crossbred wool is firm in the Bradford market. The firmness is due to special reasons, and the demand is certain tn continue strong for sonic t-inic to rnme. Merino wool is not so favourably circumstanced, and it is just possible that Australia will again have a smaller wool cheque for the 1939-40 season. Shearing will have begun in Queensland by now. and before tlie close of next, month should be pretty general throughout. Australia; for the Australian wool sales open in August. MUTTON AND LAMB. The prices for meat have been fairly steady. It remains to be seen what effect, the restriction on exports will have in the long run. It is known Unit this year there will be about 500.000 ewes for which some kind of a market must be found, but wlint of (lie future? Tlie restriction docs not apply to any particular class, but is 3 per cent for mutton and lamb. 8d it is just possible that more lamb and loss mutton will lie exported, that is to say. the restriction of 3 per cent would be made to annlv entirely to mutton, and not in any wav to lamb. There is a problem in this for Iho sheonfn niters. An increase in freight would out into their earnings. THE .SHARE MARKET.

One striking feature of the internal Joan lias been that it lias created a demand for Government securities. The prices offered are on flic basis of a return of 4 per cent or slightly more. Tlie general tone of the share market is more optimistic, and tin’s is in keeping with the tone of the London Stock Exchange. Tnternational _ politics have become calmer, and investors see no reason to be otherwise than optimistic. Perhaps n trade revival w ill follow.