DOMINION'S MEAT

New Zealand Herald, Volume LXXVI, Issue 23489, 28 October 1939, Page 12

DOMINION'S MEAT

BRITISH PURCHASE AGREEMENT REACHED PRICES ANNOUNCED BETTER. THAN LAST YEAR OUTLINE B'tf MINISTER [flV TKLEGHAPH —SPECIAL H EPOHTEII] WELLINGTON, Friday Pi •ices at which the.United Kingdom Government lias agreed to purchase the exportable surplus of next season's New Zealand meat were announced by the Minister of Marketing, the Hon. W. Nash, in a broadcast address to-night. "These prices can be considered as very satisfactory indeed," the Minister said. "They are better than last year's prices and are generally based on the 1938 figures, with some modifications helpful to New Zealand." Mr. Nash emphasised that the prices were f.o.b. in sterling. New Zealand would bo paid for the meat at the stage that it was put on board the ship. There were, one or two final details yet to be settled as to what the charges from farm gate through the various channels to on board ship would be, nor had it been finally settled what the price of by-products would be. Hence it was difficult to state definitely how the figures would work out per head in New Zealand currency on the various classes of stock. The figures, however, would Kive a clear indication to farmers as to what they might expect for their fat stock for the coming season. The Minister said that it had been arranged that 95 per cent should be paid f.o.b. and the remaining 5 per cent on arrival or due date of arrival. The Schedule of Prices Following is the schedule of prices the British Government has agreed to pay in sterling on the basis of f.0.b., with the New Zealand equivalents:— LAMB Stg. N.Z. d d Prime Down Crossbred— per lb. per lb. 2's " .... 0% 7.93 S's .. ... G r y lo 7.55 4's .. .. (% 7.02 Tcprs . . .. 5% 7.00 Prime Canterbury—• 2's • .. ... (Jy 10 7.85 S s • • •. 7.' 4's .. .. (> 7..") Tcsrs .. .. flVi o.S-i Prime Crossbred—2's . . •. ' .7 B's .... 6% 7.0 4's .. .. SV B 7.3 Tegs .. .. oVi 6.53 Second Quality—--361b and under .. <5% 7.3 Over 301b .. .. 5Vi 6.55 MUTTON Primo Wether and Maiden Edes — 4S!b and under .. 1 Y ? » 5.36 4 9-501 b .. .. 3% 4.52 57-0-1 lb . . . . 3'y lfl *1.58 65-721b .. .. 3% 4.35 Over 721b . .. 3 3.73 Wethers (2nd quality): 561b and under .. 3 l '/ ia 4.58 Over 561b .. .. 3% 4.2 Ewes: Glib and under .. 3.42 Over Glib .. 2% 2.05 BEEF Ox and Heifer — G.A.Q., 115lb-210lb: Hinds , . . . . 4% 5.44 Fores .. ... 2»/ JS 3.19 (Overs and unders at usual terms) Ox and heifer (fair average quality), all weights: Hinds . . . • 3T/ 1S . 4.27 Fores .. .. 2 1 /, 3.11 Cow (0.A.Q.), all weights: Hinds .. • • 3% ''- 1 Fores ... .. - Ar.- 3.1 BONELESS BEEF Ox .. .. 3% 4.00 Bull .. .. 3% 4.51 Cow ;. .. 3Y* 4.1 Bobby veal . .. •be PIGS Porkers and baconers: Ist quality .. 6 7 2nd quality . .. 5% 7.15 Prices are for all weights from GO-lOOlb for porkers and 101-lSOlb for baconers. Baconers must bo at least 75 per cent of the total export, leaving 25 per cent for porkers. History of Negotiations Negotiations between the Governments of the United Kingdom and Nfew Zealand were described by the Minister. "As with other products, the British Government was quickly in touch with us to make arrangements to buy from the Government our entire exportable surplus for a year of frozen beef, mutton, lamb, pork and the edible-offals, Mr' Nash said. "The first cablegram I have, dated September 5, suggested that the basis for the contract should bo that we should be paid in sterling, 50 per cent on shipment and 50 per cent on the date of arrival of the ship. The suggested price basis was .that contained in the average prices as listed bv the Tmport Moat 1 rade Association for the calendar year 1938, worked back to a price as loaded on board New Zealand ports." With relation to pig production, Mr. Nasli said, tlie United Kingdom Government suggested that it would take carcases weighing 120-^lßolb. New Zealand suggested that to bring pig carcases up to this weight in all cases would make production more difficult and that if it would take carcases of 1011b. and over New Zealand would he able to send more meat with less difficulty. The British Government a freed to this. At the same time, be said. New Zealand asked that although meat was to be frozen the high quality meat which would normally be chilled should be purchased at its chilled price.. This was agreed to by Britain. ' 1 New Zealand's Suggestions

The Minister outlined a discussion lie hjkl liiicl with mombors of the New Zealand Meat Producers' Board and other representative interests. He said that the Department _ of Agriculture had got into touch with the freezing companion to investigate cool storage facilities and bring them up to the desired storage space. This was merely a question of speeding up arrangements which had already been under discussion. New Zealand then cabled to England suggesting the following:—(1) That New Zealand would agree to sell to the British Government all its exportable surplus meat,and edible offal,'but if it suited the United Kingdom the t Dominion would appreciate being able to supply a small quantity of meat to the regular trade outside tho United Kingdom. (2) The Dominion desired full payment -when the meat was placed on board ship. The difficulty here was that with any possible disorganisation of shipping payments to producers in New Zealand would be held up. (3) Tn general New Zealand accepted the Import Meat Trade Association 1938 prices as a basis of discussion, but tho classifications of the meat were not necessarily those which would finally bo suitable. Confirmation of Prices Other discussions" followed on various aspects, Mr. Nash saidwith both British and New Zealand interests. On October G the Government again cabled the United Kingdom, proposing the final grades and classifications it con-, sidercd most suitable. It* tokl tho British Government ,tliat the Now Zealand Government would keep the grading of meat under strict control and have four qualities for lamb, prime down cross, prune Canterbury, prime crossbred and second quality. There were classifications also for wethers, ewes and beef, Now Zealand also suggested the price which it thought would

ho reasonable to secure adequate production in New Zealand. Two days ago New Zealand set out its final figures on which it thought agreement might; be reached. That morning the Government had received confirmation of those prices. The question of freezing charges and the values of ■by-products were at present being investigated by a sub-committee set up bv the (Joverniuent.

Arrangements had been made for ships to be available sufficient to empty the stores throughout New Zealand of all last season's surplus meat before the new season's operations commenced. The difficulty had been that the storage facilities at freezing works had not increased commensnrately with the increase in killings over the past 20 years, and the position had been accentuated by the fact that to-day New Zealand was killing more than double the quantity of lambs which were killed, say, in the, year 1920. However, as a result of the conferences with all the groups interested, arrangements had now been, made to ensure that the storage capacity at each of the works in the Dominion was in proper and adequate proportion to its killing capacity. "In some ways the negotiations may appear to have been protracted, but a great deal of preliminary organisation and inquiry and consultation has had to be made/' Mr. Nash said. "It will be clear that every effort has been expended on seeing that prices shall be sufficiently reasonable to ensure the production needed, and I have no doubt whatever that the prices obtained should be reasonably satisfactory to farmers." The Minister paid a tribute to the assistance bo had received from 'the chairman, Mr. T. A. Duncan, and members of the New Zealand Meat Producers' Board, the freezing companies and meat operators during the negotiations. OPINION IN TRADE SATISFACTORY BATES QUESTION OF COSTS MAIN. POINT AT ISSUE Meat exporters in Auckland were reluctant to comment last night upon the statement of the Minister of Marketing. "What we all want to know," said one exporter, "is what is it going to cost to put the meat to f.0.b.? Until that point is settled it is impossible to say what the prices will mean to the farmer." It was admitted, however, that the rates agreed upon by the United Kingdom were on the generous side and provided costs were not allowed to get out of hand they should provide a satisfactory return. Other factors which would influence the final result to the producer were the prices to be paid for hides and skins, tallow-and other by-products. Those rates were still to be decided. In the main the prices obtained on the basis of f.o.b. were regarded as better than recent ruling levels. In the case of mutton, for instance, it was said that the fixed price could be reduced by a full id per lb. to bring it to a parity with rates ruling prior to the outbreak of war. The Lamb Market Lamb prices, too, were considered satisfactory as far as the announcement went. The maximum rate of 7.93 d per lb. for prime lamb would be equivalent to about 7.63 d on hooks, which compares with the export buyers' opening lamb schedule for the Auckland Province of Bid per lb. on hooks in 193S and 9id per lb. in 1937. These rates varied slightly in other districts owing to different methods of buying. In the Auckland Province all the buying was done on hooks, but in other districts lambs were bought on the hoof. These factors tended to complicate the adjustment of organisation expenses at present under discussion with the Government.

Following are average Smithfield (London) prices of New Zealand meat for the last three years, as compiled by the Imported Meat Trade Association :

1036 1937 1938 Per lb Per lb Per lc Lamb— d d d Canterbury, 36/u. . 7.33 7.51 7.62 N.I. Downs. 30/u. 7.50 7.59 7.73 Second quality . . 7.31 7.40 ■ 7.3(3 Mutton—'

Wethers, prime, 18/u 5.33 5.66 5.18 Ewes, 56 'u. .. 3.79 3.90 3.35 Beef (frozen) — Fores .. .. 2.69 3.13 3.45 Hinds .. .. 3.90 4.14 4.31 PiRS — 00-SOlb .. .. 6.14 6.50 7.06 Sl-IOOIb .. .. 5.94 6.76 6.SS 101-1201 b . . . 5.56 6.68 . 6.68 Clearing Surplus Mutton

The industry welcomed the information that stores were to be cleared of surplus stocks. In the case of mutton this amounts to about 1,000,000 carcases, which bad been held back as a result of the British Government's decision earlier in the year to restrict imports of this type of meat. Apart from the relief which it will give to the market and to storage space, the sale of this surplus will be worth something around £750,000 in New Zealand eurrencv. ;'' •

■ Another feature of the arrangements with the British Government, which was the cause of satisfaction, was the concession secured in the lowering of the limit set for baconcrs from 1201b. to 1011b. Had this not been obtained it was felt that the trade would have been inundated with porkers which farmers could not afford to fatten to baconers. The best support tho Minister could givo his request for an increased baconer output, it was said, would bo to provide facilities to reduce the costs of production.