HOPE FOR BETTER TIMES

Timaru Herald, Volume CXXXVII, Issue 19670, 12 December 1933, Page 6

HOPE FOR BETTER TIMES

OUTLOOK DISTINCTLY BRIGHTER [ ADDRESS BY MR C. S. HAMMOND j j Stating that although in some di- | rections the future was a bit obscure. ! the general outlook was distinctly I brighter. Mr C. S. Hammond sounded a welcome note of optimism in an address to members of the Timaru Rotary Club yesterday, when he gave a comprehensive survey of the present position of New Zealand's primary products. There was one of the largest attendances on record, and included in a large number of visitors were the Rev. Clyde Carr. M.P., Messrs G. T. Dawson (chairman of the Timaru Harbour Board), A. P. Greenfield (president of the South Canterbury Chamber of Commerce). P. R. Talbot (president of the South Canterbury Farmers' Union), and Dr. P. R. Woodhouse (president of the Timaru Agricultural and Pastoral Association). Rotarian B. E. H. Tripp (president) was in the chair. Not a Prophet. “May I say at the outset that in speaking to you to-day I do so not in the guise of a prophet or even an economist or financier.” said Mr Hammond. “You have any number of those to choose from in Timaru and the correspondence columns of the daily Press will give you much more advice and information in those directions than I could possibly hope to do.” The only reason of his being asked to speak was that through his association with a mercantile firm he was expected to have a general knowledge of current affairs and be able to form an opinion of the prospects, more particularly in regard to primary products. This, the gathering would appreciate, was no easy matter. In speaking of the brighter outlook in relation to primary products, the one which is being discussed by everybody to-day, and about which everybody seems to know more than the farmer himself, is wool., the price of which has risen appreciably.” A rough computation showed the world production at about 11,000,000 bales, which represented approximately 61b a head if the total was divided amongst the nations wearing woollen goods. In analysing the reasons for the rise in wool prices it should first be pointed out that in New Zealand this year the reduction in flocks had resulted in a W’ool shortage of 35.000 bales while the carry over was 50.000 bales. The severe drought conditions in Australia had affected production to the extent of 400,000 bales, while the carry over there was 100,000 bales. It had been estimated that owing to the dry conditions in South Africa 25 per cent of the merino sheep had been lost, and this would mean a wool shortage of 225.000 bales. Last year the carry over had been 50.000 bales, but this year it should be negligible. The total shortage of 860,000 bales was close to 10 per cent of world production. Australia and South Africa’s shortages comprised principally the finer wools and this was why this class of wool had risen so appreciably.

Wool Carry-Over. Speaking of wool carry-over, Mr Hammond said that it was found that in 1921 after the war commandeer, and at a time when there was a short-lived slump, there was a carry-over of about 3,000,000 bales, but when improvement came the big carry-over was absorbed in three years. This was proof that when conditions were right there was no difficulty in getting rid of wool on hand. Although at present there was a rise of about 100 per cent in wool values compared with last season, a comparison with the previous years was necessary to obtain a true indication of the position. During the last three seasons the average price a bale at the New Zealand sales was about £7 10s. Before those years the low’est price for 30 years was £9 a bale, and this was during the 1921-22 slump. Before that the lowest price was £9 14s a bale during 1903-4. In 1929-30, 1928-29 and 1927-28, the values were £l2, £2l and £24 a bale respectively. These figures did not take into account the boom year of 1924-25, when the price was £29 5s a bale, or 300 per cent above last year. Although one did not wish to see too rapid a rise in any commodity, seen from these figures the rise of 100 per cent left a large margin between such increased value (say £ls a bale) and even the values of 1927-29 (say £22 10s), ignoring the boom year of 1924-25 when sheep farmers w’ere known as “w’ool kings.” Mr Hammond said he was not a prophet, but those with whom he had been associated, and with whom he had discussed the position, had contended that over the last 12 to 18 months wool had been forced down to unduly low levels, and that when the general recovery commenced it would probably be the first of our commodities to rise, and the rise would be more rapid than with any other primary products. Such a rise would take place without unduly affecting the pockets of the general body of consumers as the quantity of raw’ wool in a suit of clothes was only 3 to 4 lb. and even boom prices would have little effect on manufacturing costs. The wide disparity between the raw material and the manufactured article was extremely hard to followthrough the various processes and different channels before it reached the consumer. "It appears reasonable to assume that we can look for a higher level of wool values for some time to come, and In. this direction the following summarised reasons may be given." said Mr Hammond: (1) the definite reduction in the quantity of raw’ material available in New Zealand. Australia and South Africa, and the considerable time which should elapse before flocks could be built up to the previous level; (2) the general trading improvement in most countries, the consequent reduction in unemployment, and with such improved conditions the strictest economy exercised in recent years in regard to clothing and woollen goods, would r.ot be continued to the same extent; (3) the ex- ’ tremely low price for wool over the last few' years had given a substan- j tial set back to the production and ! use of wool substitutes, and it would some time for these to recover if they were developed to the same extent again. Lamb prices Improve. Referring to the question of lamb and meat Mr Hammond said that so far as lamb was concerned there were indications certainly for an improvement on last year’s values, but perhaps, not to the extent that some were inclined to expect. The sheep returns to April 30 revealed a reduction in the total flocks of more than 900,000. j but the comparison was not altogether satisfactory. The killings last season were much earlier than usual and sheep ; killed after April were much less than f hc previous year. Assuming that the

I nu oiber of breeding ewes bore the same | percentage to the total as the previous tw'o or three years—6o per cent—it was ! a question whether the actual short- . age of breeding ewes more than 200.000 compared with 1932. In any I case we could look for a reduction in the number of lambs exported, and the to Australia. The Argentine nad been reduced in consequence of the Ottawa restrictions. On the other hand, however. United Kingdom flocks had considerably increased, the lambing figures recording an increase of 500,000. but the improved conditions at Home appeared to have the effect of increasing consumption and absorbing supplies. In a recent statement. Mr D. Jones, chairman of the New Zealand Meat Producers' Board, had announced that the stocks in London were 600,000 less than the corresponding period last year, and while he did not wish to contradict Mr Jones, he knew that other people in close touch with the frozen meat trade considered that some error had been made in the figures, and that the shortage was not nearly so substantial as reported. Apart from this, December and January arrivals in England were expected to exceed those for the corresponding period last year by 700.000 carcases. This W’ould much more than counter-balance the shortage of stocks in cold store as these fresh stocks would arrive in mid-winter at Home w-hen lamb consumption was not at a high point, and one could see that there was a likelihood of values being affected in the immediate future. This week’s schedule would probably see. a reduction of *d per lb for prime lamb, and this was an indication that the position at Home was still somewhat obscure, and probably not particularly bright. Qn the other hand, however, the early New Year Ottawa restrictions on foreign meat coming into England, which had become increasingly severe as the season progressed, should have a beneficial effect on the market. Added to this w’as the fact that the number of people in employment in Great Britain had increased by more than 500 - 000 compared with last year, while the generally improved conditions at Home should have a distinct bearing on the trend of lamb prices.

“One cannot take the opening prices of lamb too seriously for comparative purposes, but the early lambs already killed, realising about 20/- to 22 6, are about 4 '- to 5 - higher than last year,” said Mr Hammond. “It appears from the figures just quoted that the London market may not be so buoyant over the next month or two, but indications are that later in the season there should be an improvement, so that in estimating the position for the season as a whole it seems reasonable to anticipate a considerably better average price than last vear. Do not rush to the thought that i am suggesting that farmers should put lambs on hooks and keep them until late in the season In expectation of better prices. When I say that the farmer's Job Is to produce and sell his produce when it is available, I am expressing only the opinion of others with a great deal more experience than I have had. The farmer should not be a speculator. Those who regularly follow’ the practice of disposing of their commodities as soon as they are available show tfie best results over a period of years.”

Increase In Dairy Production. “In speaking about dairy produce I now come to one product which is continuing to pass through a very lean period.” continued Mr Hammond, “and. candidly, the immediate outlook for New Zealand butter and* cheese is anything but cheering.” Last year, he said, the exports of butter to the United Kingdom from all the producing countries were so much greater than could be satisfactorily dealt with that British dairying interests did their utmost to bring about restrictions on shipments from New Zealand, in spite of the Ottawa agreement W’hich allowed free access for New Zealand dairy produce to Britain. This season the position up to the present time was more acute. The grading figures to date for this year showed that the butter available for export exceeded the previous year's production by 25 per cent and 50 per cent compared with tw’o years ago. The increase in cheese production was also very substantial. The shipments of butter in November were more than 25.000 tons—the normal requirements of New Zealand butter in the United Kingdom. Seldom had it been more than 8000 tons a month. The position at the moment was so desperate that the New Zealand Dairy Board had decided that at least 20 per cent of the season's grading up to the end of March was to be held from shipment till after that date This was, to a certain extent. In accordance with the Board's general policy of spreading shipments. On the face of it the position appeared anything but bright, and so far as this section of the talk was concerned. it W’as rather belied a reference to “the brighter outlook,” but there were one or two aspects of the position which should be taken into consideration. The best type of dairy farmer had through herd testing. culling and general herd and pasture improvement. increased both carrying capacity and butter fat production and if he could produce 25 to 50 per cent more butterfat than last year, without seriously Increasing his costs, his position should be maintained and perhaps slightly improved. Present difficulties would probably prove blessings in disguise as he felt convinced that before long there would be a reorganisation of the dairy industry, such as was now taking place in the Old Country. There were great possibilities in this direction both in the United Kingdom and New Zealand. and so far as the industry In New Zealand was concerned there were two matters which appeared worthy of the fullest consideration of the authorities to enable our increased production to be absorbed. The first was to stimulate the domestic demand, not only for blitter and cheese, but for milk and cream and even for ice cream, and the other was to develop markets outside of Great Britain. Mr P. O. Veale, the well-known Taranaki dairy chemist, had recently reported on the possibilities of greater consumption of milk and milk products in New Zealand. The report revealed that if each family or group of five people were induced by the low price of cream to use even half a pint daily for domestic use this would represent more than 25.000 tons of cream annually. Reference was made also to the uneconomic methods of 1 production and distribution, particu- j larly for town supply. The difficulties J of the scheme were in the speaker's j opinion not insuperable. It was being tackled in Great Britain with a complete organisation of the industry in 1 the form of a national scheme, the j dairy farmer aiming at the average price of milk at 1 - a gallon—2 - for butter fat At present British consumers were using a third of a pint of . cream a day on an average, while other j countries were using up to two pints a day. If organisation were effected the j expanded demand would have a tre- I mendoua benefit on the industry as a whole. Other Markets. Referring to other markets for produce. Mr Hammond said that Mr J E. Strachan. of Ranglora. leader of | the New Zealand delegation to the con- I ference of the Institute of Pacific Relations at Shanghai in 1931. had stated * in a recent rrj>ort to the Canterbury Progress League that "the more one ' considers the Fast as a market the more one is Impressed by its possl-

bilitles. I do not know of anyone who has investigated the matter at all who has not been convinced of this. Australia and New Zealand are the natural suppliers of pastoral products to the teeming imputations of Asia, and especially of China Japan. Dutch East Indies, and the Philippines ' "Although it is very hard to deal with the general position in such a short time. I have tried to show to the best of my ability that the outlook generally is distinctly brighter,” said Mr Hammond “Although in some directions at the moment the position appears obscure, the difficulties should be largely temporary, and with statesmanship. courage, and faith these difficulties should be quickly overcome I have not forgotten the reference made in a most excellent address by Mr W. T. Ritchie at the last annual meeting i r the Chamber of commerce *r the necessity of our becoming more 'spiritually minded' Many of our troubles to-day. I am convinced, have been brought about by the development of a gross materialism. We mifst lift our eyes to higher Ideals and develop a greater faith I only hope that th* difficulties of the last few years will have a refining influence If I have given you food for thought, and posMbly even for action, this small effort of nunc will not have been In vain." On the motion of Mr P. R. Talbot, who said that farmers felt sure that Mr Hammond was accorded a vote of