WELLINGTON NEWS

Hokitika Guardian, 10 July 1931, Page 2

WELLINGTON NEWS

NEXT SIX MONTHS

' (Special Correspondent)

WELLINGTON, July 3. During the next six months fanners will be looking for returns. Next month cows will be coining into profit and the dairy factories will be ready for the season's operations. In September or early in Oc.ober if the climatic conditions are favourable, the shipowners in the North Island will be shearing and in November the freezing works will start. During the next five months work should become increasingly plentiful, and if th farmers can afford it more workers should be on the pay rolls. Everyone will be anxious about the markets. • It will be of the greatest importance to New Zealand to know the trend of the butter market. Will the markets improve ‘r Will the average of prices be higher than they were in the season just ended ? There will be fluctuations, that is inevitable, but will the average show improvement ? This is a question that one cannot answer with-any degree of certainty of being correct, for the price level of our products cannot be fixed by us, they are fixed by the consumers. The level of prices will in the last analysis depend upon the purchasing power of consumers. Except wool, which is a world commodity, our other products, butter, cheese and meat must be sold in Great ißritain, and it depends upon the conditions there whether the prices we realise are higher or lower than the last season, As far as one can see there is as yet no rift in the cloud of depression which still hangs heavily over the whn{e world. The year’s moratorium offered by President 'Hoover will be of scarcely any benefit to the United Kingdom, but it will meap much to Germany and Australia. There is nothing in the horizon to warrant the belief that there will be any appreciable spending power in Germany and Central Europe, Russia, Australia, N.Z. and the East. The countries named will have plenty to sell but will not be- keen to buy. The outlook for butter is not of the rosiest, because on the top of restrict' d purchasing power will come increased output.

The export from the Dominion may be expected to be as large or slightly larger than last season, and Australia, owing to the copious rainfall of recent weeks, is expected to have a substantial increase in export. The Paterson Plan and the exchange are particularly favourable to the dairy farmers of the Commonwealth. It is impossible to say what the Argentine will be doing, for the news from there has been very meagre. Frozen and chilled beef from South America will of course continue to play an important part in this trade. Australia, too, ought to have more mutton, lamb and beef to export. Even if supplies do not show any great expansion there is still the problem of purchasing power of consumers to be reckoned with. But farmers should in the coming j season feel the benefit of the lower cost' of production, but against' this must be set the Increased taxation which will probably nullify the benefits of .lower costs of production. The local demand for farm products is not likely to show any appreciable increase for the purchasing power of the community is very much lower. The foreign buyers of our produce are only slightly better off than they were. Money is now very cheap in London, and it is not artiflcally cheap; it is the natural result of the slump and the prevailing want of confidence. But cheap money in the principal world centres must ultimately do good, for capital will not remain content for ever with a low ' rate of interest. The immediate outlook does not give promise of any striking improvement in commodity prices. It would be safer to base calculations on say 110 s per cwt. on butter and 7d per lb for crossbred wool, and work down to that basis. The farmers are being assisted to the limit of the Government’s power, and with careful farm- * ing and wise economy the farmers should J at least be able to pay their way in the approaching season, even if they do not earn a .small profit which everyone would be glad to see them do. ‘lt must be remembered that in every country people are concentrating their efforts to recover from the slump, and although these efforts cannot be scheduled, they are operating and their collective force must

be felt sooner'or later. It is bridging the gap between then and now that is irskome and distressing.