DISMAY FELT

New Zealand Herald, Volume LXXVI, Issue 23275, 18 February 1939, Page 14

DISMAY FELT

EFFECTS ON INDUSTRY PROBLEM OF SURPLUS Meaning of new limit SOME CONFLICT OF VIEWS With prospects of increased production this season, Dominion killings of lamb and mutton being already well ahead oL : those for tho corresponding period of hist season, several prominent men in tho industry regard with dismay a cut by Great Britain in the quantities it imported from New Zealand last year. They express tlio view that a reduction of 3 per cent on last year's exports from tho Dominion would throw the whole of tho meat trade out of gear, an almost certain surplus being produced which the local market could not absorb. This would result in reductions in the prices tho farmer now receives for both killed meat and stock.

On tho other hand several representatives of tho meat export trade aro not satisfied that the message discloses tho exact position. It states clearly enough that tho exports of mutton and lamb into Great Britain from Australia and New Zealand are to bo 3 per cent below tlioso of last yeaar, but it later makes reference to reductions in quotas applying to foreign countries. Old Quota Not Announced As for several years New Zealand and Australia have also been trading in mutton and lamb on a quota basis with Great Britain, it is thought by somo that tho message intends to imply a reduction of 3 per cent on Australia's and New Zealand's quotas. Although the limit of Now Zealand's quota last year has not been announced by tho Government, it is felt that it was so generous that even an increased production this season would still come within 97 per cent of it. New Zealand has never had difficulty in exporting well below quota limits, and last August tho Meat Producers' Board announced that the allocation for tho calendar year 1938 was considered sufficient for requirements. Quotas havo always been based on operations for a calendar year, and tho Meat Board has not yet published its shipments to tho end of last year. Its return of lamb and mutton killed in the freezing works- from tho beginning of tho present season, October 1, 1938, to January 31, 1939, shows an increase of 151,096 compared with the corresponding period. Almost the Only Market The actual killings of mutton were 457,725, an increase of 4923, and of lamb, 3,980,410, an increase of 146,773. Tho result is regarded in Auckland as surprising, for killings of both mutton and lamb in Auckland were well below normal because of the unfavourable season. However, the South Island districts havo more than made up the leeway. "We aro only entitled to assume that our exports this year will be 97 per cent of last year's," said the representative of a large meat freezing and export concern. "England is almost our only market. For years the Meat Board has made efforts to find other markets, but without much success, except for a small outlet in Canada. Tlio local market could never absorb 3 per cent of last year's exports, apart from taking its usual quantity. Tho inevitable result would bo a sagging in local prices, which in turn would adversely affect those for export. Danger of Further Cuts "It seems to me very unlikely that there would be any gain by higher prices in England because of its reduced imports. If meat prices ,aro raised in England, consumption will drop, just as it does when butter prices reach a certain level. Indeed, 1 cannot see that the British farmer will gain by the restrictions on imports for the reason I have given." A meat exporter pointed out that in tho year ended on September 30 last, the killings of mutton and lamb were 11,354,858 carcases. The elfect of a 3 per cent reduction on that quantity could easily be imagined. It seemed clear that the British Government would thoroughly test a policy of reduction of imports, and it might well' bo that bigger restrictions might be imposed. Further, they might not bo confined to meat. Dairy produce might suffer. Another exporter, who subscribed to tlio view that the British Government merely intended to reduce the quota by "3 per cent, said it was obvious that Australia's export of mutton and lamb would bo below normal because of an unfavourable season. It appeared to him that the reduction in tho quota was merely a sop to the British farmer, it being known by the British authorities that in practice it would not have any decided effect on tho situation.