COST OF WOOL.

Otago Daily Times, Issue 20222, 7 October 1927, Page 4

COST OF WOOL.

A GROWER’S ESTIMATE. SELLING SYSTEM CRITICISED. GISBORNE FARMER’S LETTER. As a rule tlie chief thing that concerns woolgrowcrs is the price their product I Brings on the market, and in the majority of cases the average grower pays too little ! attention to how much it actually costs him to grow it. . I Mr F. S. Bowen, a prominent Gisborne 1 runholder, gives some helpful information on the question in a letter, in which he contends that very few farmers seem to know how to go about arriving at the cost. In the course of an address to the Farmers’ Union, the writer pointed out that it cost 14d and upwards to grow : wool. Last year the dip was sold at an average price of 12.2fid a lb, and the previous year at 11.397 d, or an average of 2jd below what it cost to grow. As a penny represented about £850,000 to the growers, 2id showed a loss of a little over £2,000,000. Mr Bowen’s method of making his assessment of cost is as follows: — I COST OF GROWING WOOL. 1 1. Government value of land at 6 per cent.

2. Interest at 64 per cent, on sheep at 16s a head, oil cattle at £3 10s a head. 3. All rates and taxes, local and Government.

4. Upkeep ou buildings, fences, yards, dips, etc. 5. All insurance on buildings and labour. fi. Purchases of rams and bulls annually. 7. Labour, carting, shearing, wool bales, and dipping. 8. Owner’s salary for management. 9. Annual loss on sheep and cattle, 3 per cent. (say). Deduct proceeds of returns of meat and store stock sold from farm or any other produce and balance represents cost of growing wool. Average land in Poverty Bay produces from 101 b to 141 b of wool an acre. Average price received last year for New Zealand clip was 11.397 d, this year 12.26 d a lb. The Dominion average would be much above the North Island average on account of the finer wools grown in South Island. SOME INFLUENCING FACTORS. In a letter to a friend in Christchurch Mr Bowen points out that the figures would vary a good deal according to the district. In Canterbury the stock would have to be taken in for valuatiofa at a much higher rate than in Poverty Bay, but the local taxation would be lower. The returns for store sheep and meat would be better, so this would have the effect of reducing the wool-growing cost. A property should be stocked up to carrying capacity to obtain a fair criterion. If a farmer engaged in grain-growing on a large scale and kept a flock of 500 or 600 ewes as a side line, it would probably leave little cost to go against his small clip because his wheat plus lambs would absorb nearly all his cost, leaving little to go against his small and perhaps very good clip. What was a real factor in the north was the cost of running 2,000,000 odd cattle by the woolgrower to keep the country clean. The items 1 to 5 show a huge increase over the pre-war figures. In the past seven years the Gisborne man, besides boom and slump, had floods, drought, two bad lambing seasons, and one very light clip, and these of a necessity influenced the cost of growing. The mortgage on land has nothing to do with coat nor has the price the owner paid for the land. Soma uniform value must be placed on it, and the Government valuation is the only safe guide. PRESENT SYSTEM UNSATISFACTORY, “ The present system of selling wool is unsatisfactory to a degree,” continues Mr Bowen. “ Wool should be sent to a port of call and valued by men employed by the growers. As wool is valued on comb and yield a 48 comb giving a 72 clean yield could only vary in texture such as super medium and low crossbred according to how it had been grown, and so all wools would be treated m the same manner and our selling representatives stationed in England, France, Germany or any other country selling directly to manufacturers instead of a line of commission buyers coming hero and buying merely to please our brokers, who advance money to farmers. A small board could .run tho whole business for less than £50,000 a year, whereas our selling charges in New Zealand are about Id a lb. which represents on our total clip about £BSO,UuO, and if sold in England very much more. We produce in the British Empire from 62 to 68 per cent of the crossbred exportable wool of the world, and of that amount New Zealand produces from 52 to 56 per cent, and is considered tho finest crossbred wool grown in any country. I am certain that if we sold by private treaty we could obtain from 4d to fid a lb more than wo are getting to-day, and that would bring into this country between three and four million pounds more than our present haphazard system. Wo have just as much control of crossbred wool as + China has over tea, or India over jute. No substitute can ever replace wool to any serious extent, although it is very much advertised purely as propaganda to keep wool at a low level for buying purposes. We have no national spirit in this country m marketinff our produce, and I think our Minister of Agriculture has less than the average. I ; Germany had our opportunity she would organise and sell to the rest of the world at a price suitable to her growers as she did when she controlled the world s supply of potash, before the war, .which she raised from 35 70 millions pounds a year in 10 years.”