WELLINGTON NEWS

Hokitika Guardian, 8 January 1926, Page 1

WELLINGTON NEWS

FREEZING INDUSTRY.

(Commercial Correspondent.)

WELLINGTON, January 6. Now that the holidays are over and most, people have settled down to tlio realities of 1926, there are quite a number of problems that must be examined and solved if we are to avoid unpleasant crises. The parlous condition of the meat freezing industry is one that calls for special consideration. That the matter is engaging the attention of many sound business men and prominent sheepfarmers goes without saying, but as yet very little publicity lias been given to any views that these gentlemen may hold. There has been some exception, however, for Sir Jas. Wilson, President of the Hoard of Agriculture, writing to a Wellington paper, suggests the amalgamation of freezing companies. He says: “The very misfortunes of the trade point the way to amalgamation centring the work at port, merge the companies into one which would frcctzc for all, and you reduce costs and naturally charges. There never was a more appropriate time. The security of the works for an advance under the present circumstances is not looked upon with favour because there is not restricted sale, so that the closing of them would not effect the companies, but the fact of the combination it is fairly certain would find favour in business circles, especially if the produce was shipped by the producer. If the different companies really desire to act in this direction a modus operaiuli could surely be found, but concentration should be their watchword, and if it could be accomplished, it would be for the good of all.” Sir James may be said to have given expression to “ pious ” business sentiment, but it is doubtful if it will ever materialise. The country and mainly the North Island was planted with cooperative works by the farmers themselves and these concerns have suffered badly lmcausc the very farmers who helped to establish the works have declined to accord them adequate support. Instead of freezing and shipping on their own account, farmers have preferred fo accept the very good offers made by exporters for stock on the hoof, and the co-operative companies have consequently suffered. If there is to he amalgamation wlint are to be tho terms? Obviously the strong companies, and preferably companies operating near the ports of shipment alone, can take over' tho weaker concerns, hut such may rightly refuse to enter into such a venture on the ground that in any event by the force of competition the smaller concerns would pass out of existence. There may be an inducement if the leading sheepfarmers in a given district pledged themselves to put all their stock through the concern absorbing tho smaller companies, and such pledge would require to he in writing ns is the case with the dairy suppliers. Will the big sheepfarmers stand for that? Without such a written pledge it would ho folly for any large freezing company to burden itself with a number of small concerns, for farmers would soli to exporters offering a tempting price. Furthermore, it is beginning to ho appreciated by producers that straight-out sales in New Zealand are better than accepting the market rates. WEIGHING THE PROSPECTS. Quite a- number of people have ventured on expressing as to the outlook and most if not all of them have coloured their opinions with the utmost optimism, and that is the popular way of dealing with fhe prospects of the country. Hut extreme optimism is never warranted at any time any more than extreme pessimism, for both do considerable harm. Those who think that the future, or rather that 192 G will he a year of prosperity should give reasons for their opinions. The Prime .Minister considers that “the wonderful recuperative qualities of tho Dominion, combined with the industry and energy of our producers have always proved equal to any happenings, and we need therefore, have no misgivings on that account.” This is quite n simple and optimistic way of dismissing a big problem. The trouble before ns is not the recuperative power of the Dominion, nor yet tho energy and industry of the producers, hut the fall in values of our primary products. Compared with 1925 this year does not promise well. The fall in prices is certain to present some very difficult problems for tho Government and the producers to solve. We cannot have a contraction of several millions sterling in our exports without feeling the pinch, Last year all our primary products sold at high prices and there was a general increase in production; this season there is a decrease in production and prices are tending downwards. It is true of course that prices even now are not unprofitable, hut that is not the point, the trouble is that our customers at the other end have not tho purchasing power to continue paying the high prices we have been getting during the past year or two, which makes it probable that prices may go lower before they stabilise. They must recede to the level to bring them within the purse limits of the British consumers. It is when producers and others have to adjust their affairs to conform to the new conditions that serious trouble will be experienced.