SHARES & MINING

Observer, Volume XL, Issue 6, 11 October 1919, Page 22

SHARES & MINING

A "CONSTANT READER" complains that a pessimistic view has been taken in recent reference made in these columns to food products of New Zealand that are exported, which are mainly frozen meat, butter and cheese. Whether the views expressed are pessimistic or otherwise, is purely matters of opinion, but certain evidence may be adduced to warrant the view that New Zealand will in the near future be obliged to face very keen competition. We have had to contend with the competition of Argentina for some time and we have faced it rather well. But our people overlook the tremendous resources of that Republic.

In the Argentine there are 35,000,----000 head of cattle, 85,000,000 sheep, and 3,300,0.00 pigs, and there are horses, mules, goats, etc., besides, and it is estimated that Argentina lias nearly 485,000 square miles of territory available for livestock. There is tremendous scope for development in Argentina, and development, will go forward under the new world conditions.,. Brazil has 26,000",000 head of cattle, about 5,000,000 sheep, besides other live stock. -Before the war, Brazil was not known in the frozen meat trade. In 1914, she shipped a few tons of frozen beef, this was followed by an export of over 8,500 tons in 1915; inl9i6; nearly 34,000 tons; in 1917, it had increased to 66,450 tons, and while" in 1918, the amount shipped, 60,500 tons, was reduced owing to shipping shortage, the fact that three additional freezing plants were being added by American interests to those already in operation /proves that the future of the Brazilian frozen meat industry is regarded with favour.

In the Republic of Uruqiiay there are, according to official figures, 7,----802,000 head of cattle and 11,472,800 sheep. The freezing establishments in the first three months of this year slaughtered 253,000 head of cattle, as against 198,000 for the same period of 1918. There are four large freezing plants in Monte Video. In the Republic of Venezuela there are 3,500,000 head of cattle, and it is estimated that there are more than 100,000 square miles available for cattle raising. There is a Britishowned freezing and chilling establishment, which is meeting with great .success, which means that others will follow.

In the Republic of Paraguay it is estimated that there are 5,500,000 head of cattle, and cattle-raising is the main asset of the Republic. Excellent pasturage land can be purchased at 4s. 2d. to 16s. Bd. per acre. Some hundreds of thousands of acres have been acquired by some'of the leading British meat-packing concerns, and Paraguay will have to be reckoned with sooner or later.' There are many thousands of acres of fine grazing land in Colombia, available all the year round, magnificently watered, and lacking only the necessary transportation facilities and markets. Colombia has about 5,000,000 head of cattle, and ships steers to the United States and Panama. In other Latin-American Republics, such as Mexico, Cuba, Costa Rica, Ecuados, Guatemala, Nicaragua, Honduras, and El Salvador, offer great opportunities for cattle-raising.

Besides Latin-America there is South Africa, which ten years ago was a meat importer, but is to-day an exporter. During the war the troops in Egypt had to rely upon South African supplies of meat. In

Madagascar there, are six freezing plants. Those are the facts upon which to base opinions. In these competing countries there is cheap land and cheap labour, just the reverse of what obtains in New Zealand and Australia. It would be foolish to ignore these factors, for the development of the cattle industry in the countries named, and the war stimulated the development, must in the near future affect the meat trade and the butter and cheese trades.

Wool stands in a better position, and while it. is obvious 7 that wool values must drop, it will be many years, probably a decade, before the pre-war level is reached. The enormous reserves that were built, up by the woollen industry in Britain disappeared during the war, and when was granted Germany, supplies of wool were exceedingly small. All control of English* wool was withdrawn in May last, and although Australasian wool is still commandeered it is meeting with excellent prices. It is estimated that Britain Avill need to import 500,000,----0001b. of wool during the next 12 months to meet the demand, and that weight of wool will in all probability be wanted for several successive years. Practically the whole of Europe has to be found with woollen clothing, and in addition an effort is bound to be made to build up reserves. But wool was not covered by our remarks because it is not a foodstuff.

''Constant Reader" asserts that "we could have purchased all the ships to carry our produce home at pre-war rates for less than the money the producers of New Zealand have lost over their produce being commandeered." This fairy tale has been published before. The producer did not lose a penny-piece through his produce being commandeered, because every commandeered commodity was purchased bj r the British Government at an advance on prewar values. When Mr. Massey returned from his first trip to London he apologised to the producers in New Zealand that he was unable to hit up the British Government for higher prices. Had there been no commandeer there would have been no market, for the British Government had control of the shipping, and would naturally have sent them to the countries where the produce could be purchased. The producers have done very well, and the present high prices of produce, the prices given by the British Government, are responsible for the high prices of land.

Meat exporters here have complained Bitterly with respect to the prices at which New Zealand meat lias been sold to consumers, this being very tmich in excess of the price paid to producers. Such complaints are childish. The British Government having bought the meat, has surely the right to do as it pleases with it. The farmers, however, appear to think that they must get a big initial price, share in any profits realised on that initial price, but not to be held responsible for any loss. They want it all one way, and if that is not conceded there are bitter complaints. The farmers of New Zealand, like the farmers in all parts of the world, have done exceedingly well, and they should be expressing their thanks and not grousing 'about the allegei!_amounts lost. Now is the time to study as well as possible, and we commend the -figures given here to the earnest consideration of all farmers. What is going to happen when prices of all our principal commodities, except wool, decline? That there will be a drop in prices everyone agrees, but some seem to think that our prosperity will be all the greater for the fall. . ' •

It seems to the writer that the world has to face a period of adversity. A common level has to he reached before we can begin the real work of reconstruction. Prosperity, or at least war prosperity, does not furnish that common, level, but adversity will, and the pendulum is

swinging in that direction, its movement being accelerated by the world-wide labour disturbances. If. we were wise instead of encouraging the squandering of money we should be taking steps to further develop the country. Land settlement is only one factor—the key to the position is transportation, roads, bridges, trains, trams., motors are all wanted, and with the increase of transport facilities there will follow wider'settlement, arid necessarily increased production. The public with all it means, is huge, the taxation is heavy, and the public expenditure is increasing; the load is very heavy, and will become unbearable if export values of- produce decline.