WHEAT PRICES

Dominion, Volume 14, Issue 146, 16 March 1921, Page 9

WHEAT PRICES

MINISTER’S STATEMENT “GUARANTEE FULFILLED" THE MOBS OF RECKONING A complete statement regarding -wheat prices and the method by which they W.ere determined was made by the Minister of Agriculture (Hon. W. Noaworthy). “It will be remembered (said the Minister) that afr the end of February of last year I met representative. wheat-growers In conference at Christchurch, and discussed fully with then! the question of the production within New Zealand of sufficient wheat for our own domestic requirements, thereby doing- away with ■the necessity of relying on importation to provide us with our staple food. I need not stress the dangers that we run if we have to rely on importations of either wheat or flour to feed our, people, as it is fairly obvjous that our supplies are liable to suddejt interruptions if anything interferes with® he smooth runnng of our Shipping. During recent years shipping communcation with our nearest source of supply—Australia—has interrupted •for long periods, and during these interruptions, had we not had within our own borders sufficient of wheat and flour, the people of New Zealand would have been reduced to the verge of starvation. The Minimum Guarantee. “At the date I have mentioned—February, 1920—the Government Statistician had estimated that there w.aa under crop only 140,000 acres of wheat, whereas if we are to be independent of outside supplies we must crop approximately from 250,000 acres to 275,000 acresr-that is. assuming the yield to be normal. With a knowledge of the seriousness of the position that faced New Zealand, I offered on behalf.pf the Government a minimum guarantee of 7s. 3d., 7a. 6d., and 7s. 9d. per bushel, f.o.b. southern ports, * for good milling wheat Of the season 1920-21, Iftth six increments in price of id. per month from May 1, and, further, that market rates in excess of the minimum would be paid if the value of wheat rose when we had actually to take over and harvest the crop. During last yea< the pride of wheat rose steadily in the world’s markets till May, when wheat was worth approximately 18s. bushel, f.o.b. New York, allowing for the depreciation In the exchange., From May until Octoher there was a steady fall in the price of wheat. Tn the months of October and December there were sensational drops, and the decline still .continues. Dor instance. in October. Australian wheat was Quoted in London at 121 s. per quarter, whereas to-day's price is 725. per quarter —a drop of 6s. ltd. per bushel.

Interpreting the Guarantee, /“In July of last year I met'representatives of the Wheat Trade Committee for thz, purpose of determining what interpretation should, be given in certain circumstances to the Government s guarantee. It was necessary, for instance, to determine on what basis market rates would be lived It was anticipated at that time that Australia, if she had a surplus, would be back,to normal trading conditions, and on thia assumption th.e lollowing basis of interpretation was B^Ta) <1 In P the event of New Zealand requiring to import, an adjustment will be made on the basis of the price at which milling wheat cun be purchased in February. 1921, and landed ex wharf, having regard to quality and to the necessary adjustment between North Island and S “'(b? in'the event of New Zealand growing sufficient for its requirements, an adjustment will be made on the basisi of f.o.b. Australian value, provided Australia has any exportable surplus, but in any case the purchase price will not be less than the minimum for the respective varieties with the monthly increment. “This raises - two important questions: (1) Will we require during the vear to import wheat, or. alternatively, have we reasonable grounds for supposing that the present crop will suffice for our requirements? and 12) what is the world market rate for wheat in February, 1921? Season’s Requirements. “I will deal with the former question. As a. result of the Government's guarantee the area under wheat rose irom 14U.00U acres to 210,Mb acres. The Wheat Control Office figures show that last year the average yield was 35 bushels per acre. If this yield could be relied on, the total crop this year would amount to 7.350.U0U bushels. It would be unsafe, however, to anticipate that we will this year get the same big, phenomenal vield as occurred last year. From all reports coming to hand at present, it is clear that the yield per.acre this year will be big. The average of the last ten years has been approximately 29 bushels per acre. Assuming the average this year to be 30 bushels per acre, the total yield will be between 6 million and 6J million bushels. The requirements of New Zealand for all purposes are difficult to estimate. For the year just closed the mills gristed approximately 5,600,000 bushels. Tito seed requirements are probably 500.000 bushels, while last year wp got through w’th another 150,000 bushels for all purposes, including the requirements of the poultry industry. Hence last year we could say that our requirements were approximately 6i million bushels. It is clear therefore that if nothing untoward occurs to upset the estimates in regard to this harvest, New Zealand could if necessary got through»this year on its domestic production of wheat. Market Value. “The next question to determine is the market value of wheat during the month of February, as, according to tho Government’s promise, we were to pay the farmers for this crop that rate if it could be . determined. During February the price of Australian wheat in London fell as follows:— Per Per quarter. bushel, s. d. s. d. Feb. 2 97 6 equalling 12 2} Feb. 4 92 6 equalling 11 64 Feb. 8 „ 75 0 equalling 9 4J Feb. 12 75 0 equalling 9 4J Feb. 16 ; 72 0 equalling 9 0 Feb. 26 72 0 equajling 9 0 To'errive at the equivalent value f.o.b. Australia, allowance must be made for freight • and .insurance. Freight has shown a considerable drop. In December, 192/1, and January-February, freight quotations have receded from 160 b. per ton to 755. per ton. I. therefore, give another table, showing the f.o.b. value of Australian wheat after allowing for freight as quoted in Australia on the same date as wheat price quotations in London. This will give the price for wheat in Australia at above its real value, as allowance must be made for the time it. takes wheat to reach' the London market:— c.i.f., Lessfrght. f.o.b. London, and dirges. Aus. 1921. ‘s. d. s. d. 8. d. Feb. 2 12 21 3 5j 8 9 Feb. 4 it 6:1 2 Ilf 8 7i Feb. 12 9 41 2 1 7 3). Feb. 16 9 0 2 1 6 11 Feb. 26 ...’. 9 0 2 1 6 11 To arrive at the actual worth of wheat in Australia to-day. the price in London to-day should be taken lens the cost of transportation of the wheat, now arriving in' London. Thus to-day’s price in London for all Australian wheat now arriving (which was shipped, say, six week’s ago) is 9s. per bushel; the freight at which it was carried six weeks' ago was 1355. per ton, equivalent to 3s. 7«d. per bushel: other chargee Id., making the total charges 3s. IM.d. per bushel. Therefore Australia will receive for this wheat a return of ss. Hid. “The Australian Wheat Board in De cember fixed tho price of wheat far domestic consumption and for export at 9s. per bushel, and prohibited tho export of wheat from Australia; except through the Australian Wheat Board. Tne Government, of course, were quite viihin their powers In fixing the price for domestic consumption at whatever figure they liked, but the price for export depends entirely upon what buyers in various parts of the world -renared to give, and the London market still rules the world mice of wheat. For export, therefore. they could ust ax reasonably have fixed the price at 20s. per bushel, but that would not mean they con’d get this price from buyers, nor are they getting 9b. from export buyers. Real Values. "I have shown that for wheat shipped in January at the high rate for freight, then prevailing, they are realising today in London the equivalent of ss. 3Ja. f.o.b. Australia. I do not say that this is the value of wheat f.o.b. Australia today, ns freights in the meantime have considerably fallen. To-day for filll cargoes freight as low as 655. per ton has been .quoted- Assuming the price of wheat falls no lower in London, but remains tit 9s. per bushel, then when thin wheat paying a freight of 65s per ton reaches the London market it will return Australia the equivalent of 7s. 3d. per bushel, f.o.b. In fact, our advices from jjvilnev state that this figure, and not th" Wh»at Tlo-rd’" qi-ntofin-’ is >he real value of wheat f.o.b. Australia. Further-, more, tho Minister of Agriculture i.i Svdtibv pt a deputation of millers on February’ 27, admitted having sold nJ. Bs. fob' Australia, and Australian newspapers ,

of the same date reported sales at the equivalent of Bs. per bushel f.o.b. “In settling the price# for New Zealand, I adopted the admitted price of Bs. per bushel, f.o.b. Australia as the basis of cnliulattons for this year’s crop. Io import wheat from Australia to New Zealand costs approximately lOd. per bushel; this would mean wheat cost, ex ship s slings Auckland. Bs. lOd. The equivalent price in the South Island of wheat selling for Bs. lOd. in Auckland is approximately Be., and this is the price I have recommended the Government to fix for, our best grade of wheat, with the proportionate reductions agreed upon for varieties less in ounlity. I claim, therefore, that the prices of New Zealand wheat fixed by the Government fulfill both in the letter and in the spirit the terms of our guarantee, and in addition the Government has guaranteed a. minimum price for next, year or ss. 6d.. ss. 9d„ and 6s. 3d., with the same monthly increments.” BOWLS . — VICTORIA PAST V. PRESENT MEMBERS. The annual match, Past v. Present. Members of the Victoria Bowling. Club, was played on Saturday, under delightful conditions. Teams of six rinas n-side were selected, and before the games the president of the Victoria Club (Mr. W. E Jackson), extended a hearty wf* 00 ™® to the past members, and expressed the pleasure the present members felt at meeting their old comrades at the annual reunion. The scores were as follow (past members being mentioned first).; -Walker Levi, Mitchell, T. Mayer (s.), “.v. Haugh ton, Stevens, Marks. Norwood (s.l, 20, Orav Chapman. Veitch, Bary (s.) 22, Mafeley, Menelaus, T B™ck2* i ß iV’jsi re K ,nB v. Po“’L MLean, Fossett, Redstone (s.), 15; Redmond. Besant, North, don lr Snaddon 1 %.h22® £ Tlmbiyn, J. Members, 105; Present Members, 120. HATAITAI V. LYALL BAY. Hataitai and Lyall Bay met in friendly games on Saturday, the results (Hataitai being mentioned first) being:Home: Buckmaster, Ardell, Wellings, Burgess (s.). 29; Burgess (s.), 12; Heniy. Bailey,. Mackay, Young (s.), 18, Fonder, Gemmell. Mowtell. Raven M,. 18. Away. Aitlin. M’Whannell, Bowling, daridge (s.). 36; Toomer, Hackworth, Moran. Brightling (sj. 11. Jamieson, Slater, Williams, Anstev (s.). 18; Kerr, Bertram, Morrah, Dustin 'a.), 18. Hataitai, 100; Lyall Bay, v. Victoria.-Hataltal: Kean. Stonebanks, A. Martin, Claridge (sk 33: Victoria: Thornley, Thornley. Hunt, BoltoJunior jftnrs.-Hataltal: Moeller, Gully. Richards, Hunter (s.l. 36; Seatoun: Belk Bedford, Milller, Stone (a.), 10. PUBLIC SERVICE V. REST OF WELLINGTON. The match between the Public . Service and the Rest of Wellington, which has been arranged for St. Patrick s Day, proraises to be a great success, as nearly every bowling club attached to the w cilington Centre is taking part, and the number of players on’each side will be a record for -such a contest. The following are the teams entered:— Public Service Rinks.

Wellington Olub.-Potter (s.), Ingram, Knapp, Tregoning; Jackman (a.), Duncan, Waddell. Jessup; O’Donnell (s.). Purdie, Gihbes, Smith; Corliss (s.), Blake. Redmond. Hyams; North (s.), Ledger, Hooper, M’Namara „ „„ , . ~, Thorndon Club.—H. D. Thomson («.), W. E. Spencer, P. Riddick, Williams; K I. Burdekin (s.), T. S. Ronaldson. h. Davy, L. Hutton; D. Y. Wilson (s.), M. Kilgour, R. J. Collins, C. Batten; J. Dodds (e.), J. T. Dumbell, J. J. Gamble. C. E. Chittey. Hataitai Club.-D. Ardell (s.), D. Claridge, Edwards. W. R. Jourdain; J. Kershaw (s.), M. T. Townsend, Richards, C. E. Bennett; G. Halliday (s.). W. A. Wellings, J. Donald, Carrad: W. Newton (s.), H. L. Mo'ston, R. A. Bolland. R. Bell. Victoria Club—Denby. Smedley, Simmonds, Chittey (s.); Wyatt, Redmond, Scott, Betty (s.); Herron. Morgan, Innes, MacLaurin (s.): Skinner, Fantham, Campbell, Marks (».). / „ Kelburn Club—Compton (s.), Nicholls, Rose, Casey; F. • Widdon (s.). J. Widdop, Duff, Hanley; Johnson (s.), Newman, Porter, Wynne: J. Caughley (s.). H. Gannaway. F. S. Popo, Marris; Hutchings (emergency). Newtown Club—J. M. Brackenridge (s.i. G. Scott, Popplei W. Leahy; G. Munro (s.). D .Munro, De Tourettes. Chegwidden. Karori Cluj).--J. C. Fulton (s.), Lyall; Banks. Jordan. . . , Lyall Bay Club. —W. P. M’G'rr (s)., J. B. Hackworth. W. Shore. Pollock. Petone Club.—Reynolds (s.l, Naughton, ,Robertson. Hone; Pawson (s.), Millington, 'Herman, .Powell. Khandalla.h Club.—H. M. Nalder («.). Hutchings, Wright. Barnett: P.,S. Waldie (s.), Gilbert, Worsfield. M. C. Smith. Johnsonville Club.—Tanlln (s.l, A. J. Morgan, F. T. O'Neill. M’Cowatt. Lower Hutt - Club.—Three rinks. Club Rinks (Rest of Wellington).

Wellington Club.—Robertson, R. Thompson, Fairway. W. Thompson (s.); A. J. Bennett, J. J. Webb. Crane Kinvig (s.); Plzer, M. Martin, Ballinger. W. Glendining (s.); Helliwell, Birch. Underwood E. J. Hill (s.); Rennie. Salek. Hamilton, Tasker (s.). Thorndon Club.—H. Jay. J. S. Honlder, J. G. Chapman, J. White (s.); M. Murdoch, Jojin M’Eldowney. H. Hull. F. Foley (s.);’ A. Macintosh. E. F. Hadfield. W. Wiggins. H. Upham (s.); Jacob. M’Eldowney, W. 11. Kimmo. J. Stanford. G. Johnston (s.). I-latnitni Club.-Wigham, P. von Hartitzsch. F. Petrie. R- J- Barnes (s.); Watson, W. Johnston. T. Ward. IV. E. Chisholm (s.); K. F. Shorney, E. Rose. T. Williams. A. -Ulfiridge (s.): F>. J. Reay, H. Shepherd. Slater, P. M’Whannell (s.). Victoria Club.—Horton. Baggett. Mack. \Tackson (s.); Jolly. J. W. Martin. H. J. Reid, Townsend (s.); Paul. Cole, .Pole.. Godber (a.); Madley, Mendlaus, Jamieson, Hatch (s.). • Kelburn Club.—Carter. Taylor, Bemnster. M'Callum (s.); Ivory. Parkinson, Williams. Meadowcroft (s.); Ohanmnn. Rev. Inglis. Voung. Rontlev (s.); M'Tlwraith. Oakes, Miller, E. C. Gannawav (s.). Petone Club—Coles. M'Fwen. Borthwick, Hall (s.); Doneghue., Aitken, Walton, Leavey (s.). Johnsonville Club-Beaumont,, Thompson. Orr. Cbok (s.). Khandallah Club—Living. Hare. Taylor, ,T. A. Plimmer (s.); Rochford, Stephens, R Plimmer. Bourke (s.).

Lower Hutt Club: T. Watchman. T. Humphries. Ginger. Young (»); Burgess. Purdy, G. E. Smith. Yates (s.); Guinness. Barry,. Rowe, Dempsey (b.).

The foliowin" will renreßfnt Victoria in friendb' matches on. Rntiyda-v:—Against Lyall Ray—Home: J. W. Martin. Johnstone Tiicken. Rnlton (s.l: Rnwusley. Morgan. Mpn-k, Macloprin (c.v .‘.wav: Cpmn. hell. v. «torpns Cndhcr. Ke-th (sliHauahtor. Redmond. Drnnent. Mar'"; (■•). Agn'nst Karori-Home: Tenvaslsiß. Robinson. Fro---•r Taws («.): Reaaett. Ttorron. Vnrcoa. Redstone (a.). /wav: R. Tlrigoy. Downlo. (s.); Danby.’ Evans. Jamieson. Hatch (b.).