PRICE OF BREAD

Dominion, Volume 8, Issue 2400, 4 March 1915, Page 6

PRICE OF BREAD

IS THE INCREASE JUSTIFIED?

INTERESTING FIGURES

REVIEW OF THE POSITION STATEMENT BY MR. MASSEY A few days ago the price of the 21b. loaf of bread became sd. When wo can all recall the time when the price was only half what it is to-day, remarked a local business man yesterday, some idea' will be gained of the economic pressure that is being exerted on the more needy in New Zealand, and the urgent necessity that exists for the authorities to take every precaution to prevent anything in the way of exploitation. The riso of the 21b. loaf to sd. in Wellington, it was pointed out, has taken place owing to the price of flour soaring to £17 and: £17 30s. per ton in Wellington That, said the business man in question, on the face of it, seems quite rational, but whilst the price of bread is being regulated by the latest and highest price of flour, there are bakers in Wellington and throughout New Zealand who are still working on contract flour purchased at £5 per ton under the price now obtaining, and such bakers, receiving sd. per loaf, must be reaping a golden harvest.

Then the Government has imported a considerable quantity of wheat from Canada. Thiß wheat was bought at 6s. 3d. and has been sold to the millers at ss, 9d. per bushel—a loss to the State, the 6d. per. bushel. In view of the above statements inquiry was made yesterday as to whether the Wheat and Flour Committee' was stipulating that millers purchasing , Government wheat should sell, the flour at a given price. It was ascertained that that was .the original idea, and it was worked out that with wheat at 5s 9d. per bushel, millers could sell flour at £14 10s. ; per ton and make a fair profit. Aocording to the chairman (Mr. R. Triggs) this was found to be not . always practicable, as tho millers, in order to turn out the quality of flour desired, had found it necessary to mix' the Canadian with the. New Zealand wheat in proportions varying as from two-thirds Canadian and one-third New Zealand, and even half-and-half, and aa New Zealand wheat was considerably higher in price than Canadian, they found that the flour could not be turned out at the price originally fixed by the committee. The price of flour was fixed at £14 10s. on the understanding that the wheat from which it_ was to be ground would cost the miller ss. 9d. per bushel, but when it became • necessary to mix this wheat with an equal quantity of higher priced New . wheat the miller was given permission to raise the price., of his flour in proportion to. the average price of the wheat that he used in making it. The extent'.to which the committee had proceeded was to obtain written assurances from the millers that were'using Government imported wheat that the price for flour would be regulated as fairly as possible by the cost of the wheat.

To ascertain the- variation between the £14 10s. per ton, f.0.b., originally fixed for flour by the! committee, and the price ruling to-day, a leading firm of flour merchants was consulted as to yesterday's price for flour. The answer was somewhat. dogmatical. "I don't think we can get any, but if we oould.the prioe would be £17 f.o.b. in the south.'' The Government Statistician (Mr. Malcolm Fraser) has on record the price that bakers in Wellington have been paying for flour for some time past. During the first fortnight last month one baker received a consignment of contract flour at £9 10s. fob , and also purchased &ome at £15 10s, In' Christchurch .there were sales at £15 10s. delivered to any part of the city or suburbs, and others in Christchurch bought at £15 10s. less 5 per cent, and 2i per cent. A Timaru miller sold as much as 93 tons at £14 10s., and .another 92 tens' at, £15 4s.\ One line, of 376 tone was sold by a Timaru mill at £15 15s. 1 These j prices go to prove that there are fairly large stocks which have been purchased at a price under the 1 ruling one, but all bread is being charged for to-day as though £17 10s. or £18 had been paid for the flour, which must be highly remunerative to those who bought a month ago, and correspondingly unfortunate for the public. The Mowing is the bread barometer covering over a year past:— 21b. loaf.

January to August, 1914 ...... 3J September "to November, 1914 4 December, 1914 H March, 1915 5

THE BAKERS' VIEWPOINT

NO ADDED PROFITS. "LUCKY TO GET BREAD SOON." A few observations on the state of affairs were made to a Dominion reporter yesterday by Mr. W. A. bellow, managing director of the New Zealand Automatic Bakeries, Ltd. Mr. Keilow says, in effect, that the bakers are making no added profits out of the present high\ price'of bread. , Mr Keilow referred first of all to a statement that bakers were now making bread in Wellington from flow purchased at much below tie current market rates. "That state of tongs .does not obtain in Wellington, said Mr. Keilow. "I think ours, was thei only Wellington firm iJhat had contracts of any size with millers, but our contracts ran out months ago. Our contracts were at the rate of £10 per ton f.0.b., which means £10 12s ' f Just before the war we tried to place bjc contracts at this price, but we could not get a miKer to consider them. The prices you have quoted there are all too low, I think. I assure yon that we have paid £18 a ton for flour that we have had to buy. and then we had, the greatest-: difficulty in getting supplies We could not procure our flour in the Tegular way. from millers, and we had to buy it from merchants or anybody else who had it Now we have to'hand a shipment of American flourwe are -landing 200 tons to-day-wMi will carry us on now. We bought this flour some three . months ago. The price was higher then than the prevailing rates, here, but, I.could see how things were going, and I believed that it was necessary for us to import. Wo have paid £18 10s. for some flour since our price of sd. for tho 21b. loaf justified? Well, I blow that wo are not now making as much profit at that tittop as wore • wcr© w ligix W6Sd the lb loaf at 3Jd. When flour cost us £10 12s. per ton we sold bread at 3Jd. The price of flour to day would not be less than £17 10s. f.0.b., which means £18 2s. to us. This means that while the cost of flour has gone up £7 10s. per ton, about 70 per cent., the price of bread has been raised from 3*d. to 5d., or about 40 per cent. In the spme time horse feed, a very big item of oxpeuse in our. business, has more than doubled in price, and also fuel is * "People should be reminded that they •mar bo lucky to get bread at all. soon. Tlniy do not know how near they were to being compelled to go without a UUle while since, A faw dajp ago we

were afraid we would not be able to keep our business ■ going, and probably wo would not have been able to do bo but for the timely arrival of this flow from Amerioa. And bread may get still dearer, for unless the Allies can force the Dardanelles and release the Russian supplies, wheat will get much dearer. I say that It will go to £20 a ton, iii spite of anything that may be done here. J\Tiile we are compelled to import any part of out wheat or flour, the ruling price here must always be regulated by the state of the market in London. Tn the meantime I think Wellington people have nothing about which tliey can reasonably complain. I understand that bread has been selling at a higher price in other cities than in Wellington. In Auckland bread has been selling at sd. for some little time. At anyrate, it is true that we are making lower profits with bread at sd. than wo were with bread at 3Jd., and the baking trade is one that is always running on a very small margin of profit."

WHAT SAVED THE SITUATION

GOVERNMENT IMPORTS. REPORT OF THE COMMISSION. "There is one point that has never been sufficiently emphasised in this oontroversy," said the Prime Minister yesterday. "The point is that but for the importations of wheat and flour by the Government _we should undoubtedly have been without flour for a few weeks prior to the new harvest coming in. That faot has never been fully appreciated. As for the increased price of wheat, it is due not to the war alone. The war has undoubtedly had the effect of increasing the price of wheat all over the world, but the high price here is due to the unfortunate fact that we havo had unfavourable seasons, both in Australia and New, Zealand, in consequence of which' New Zealand has not for two seasons, and/Australia for one, produced enough wheat for local requirements. Anyone who reads the price lists in our newspapers will see that in all the States of the Commonwealth, with the exception of New South Wales, foodstuffs, and especially wheat and oats, are selling at higher prices than in New Zealand. Victoria and Tasmania have followed the example of New Zealand, and are now importing wheat from the Argentine, but at a very much higher rate than we have had to pay. for our imported wheat up till the present. "The indications are that in New Zealand a very much larger area than usual will be laid down in wheat during the coming seed time. We can only hope that the yield per ; acre will get back to normal. If it does, all difficulties in respect to the supply of wheat_ and flour will cease to exist. That is the key to the whole position. If our settlers are only given sufficient inducement to increase the area under crop, there will be no further troi'-V'.a."

Mr. Massey also made available'.'the following recent report of the Food Commission' on tHe price of bread. It refers especially to Auckland, but? it applies equally to Wellington:— a"*. ""The price now being generally ed by bakers in Auckland for the loaf delivered is sd. From the trf> dence it appears that the present pric« charged for flour by the, local mills-M £16 10s. The price for flour from' th' 4 southern mills is also £16 10s., which; with transportation and other charges, is equivalent to £17 10s., approximately, in Auckland. The local mills are able to supply only about half, of the local demand, and consequently Auckland bakers are obliged to obtain about half their requirements from the southern mills at the higher price abovenamed. The average oost of flour, therefore, to looal bakers is about £17 per ton. With flour costing this amount the _ Commission. are of opinion that, having regard.to the increased oost of delivery owing to the high price of horse feed, the price of sd. for the 21b. loaf delivered to the customer Jeaves the baker only a. moderate margin of profit, and cannot therefore bo regarded as an excessive price."