WOOL AND WHEAT PRICES.

New Zealand Herald, Volume LXVII, Issue 20514, 15 March 1930, Page 9

WOOL AND WHEAT PRICES.

INCREASING PRODUCTION. FUTILITY OF PRICE CONTROL. Speakers at a pastoralists* cnnferebce at Moree believed that by unanimous association Australia, New Zealand and South Africa could enforce a minimum price for wool. The conference endorsed a proposal to endeavour to bring about concerted action. There are many wheatgrowers who would wish similar action taken in regard to wheat. Yet the primary/ cause of the low prices in both these commodities is the increase in . production the world over, says the Sydney Morning Herald. That increase in each case was brought about by profitable prices in former years. Tako the case of Australia. With a moderate setback in 192324, and another in 1927-28, wool has increased heavily in the past eight years. The yield of 1928-29 was 31 per cent, above that of 1921-22. The Australian wheat yield lias increased much more slowly, and reflects climatic conditions more sharply. If Western Australia be excluded it is doubtful whether on the average there would be any increase on tho past nine years. Australia is a small factbr in the wheat production of the world, although as an exporter sho has somewhat more influence'than licr production would lead one to expect. Still, the world harvest has a greater influence on prices than the surplus of exporting countries. In tho figures below of world production the wheat production of the last year given is 33 per cent, higher than the production of tho first year. The last year is not tho year of highest production, but the figures show that tho trend is decidedly upward. As to wool, the statistics show a continuously upward with the last year 35 per cent, above the first year in tho table below.

•Includes present season Australia. Woolgrowers and wheatgrowers overlook the fact that as regards marketing they are not on the same plane as secondary industries. A boot manufacturer, should ho find production increasing beyond payable absorption of his product, can at once reduce his output. Can tho woolgrower at once reduce, or does the wheatgrower reduce ? Both want pools ih order to force buyers to take thp increased production at about tho samo unit price as in tho years of lower production. If the scheme were successful, still moro production would be stimulated, and the problem of disposal would grow 'more aoute. Tho lesson of tho Canadian wheat pool and of control of wheat in tho United States is before producers. The weight of wheat which those controls are keeping off the market is responsible for part of tho present weakness of wheat prices. At the Moree conference the rubber control scheme of British Malaya was quoted as a success. Certainly it kept up prices for a time by restricting output in British colonies, with the result that output in Dutch colonies was encouraged, and the weight of the Dutch production, caused the ultimate failure of control. If production increases beyond the - increase in population nnd continues to increase season by season more quickly than the increase in population prices cannot be maintained.

WORLD PRODUCTION . Wool. Wheat. 10001b. 1000 bushels 19'22 ... 2,701,7-27 3,128,872 19-23 . . 2.720.S40 3,818,514 1921 . . 2,7-20.070 3,489,370 1025 3920 . . 2,820,498 3,917,296 .. 3,022,289 4,179,181 19-27 . . 3,394,497 4,292,77(i 19°8 .. 3.107,381 4 1 (i08.67'2 1929 — 4.238,328*