Farming Column

Hokitika Guardian, 30 December 1933, Page 8

Farming Column

FARM PROPERTY * _ DEADLOCK OYER PRICE

j n common with every c-thei phase of the industry the farm property market has become infected with the optimism fathered by rising pi ices and the improved outlook, but although potential purcnshing power and "potential selling power is greater at present than it lias been for two years, sales are as hard to make as they were in the depths of the deression: Stock and station agents all find the same barrier of laud values too high to give a. reasonable return on present prices. The manager of the land department of one of the big stock agencies in the South Island said that he had a number of clients with cash waiting anxious to buy, but few properties on the'iii owners valuations would show anything iiko a reasonable return, even when the present increased prices tor wool and liunbs were used for calculations of price. If a farm could show a r'eturn of 5 per cent on. the outlay of the purchaser there were plenty of men with money to buy.

Land safes have followed rather an unexpected course in the last five years. In 1929 there was good business doing, but when the slump came sales almost ceased, as everybody then believed that the period of low price would be short. After a year a number cf holders recognised that the conditions of 1930 were likely to last, and were willing to sell on the prices of that year. For a time the exchange of properties became almost norpial. After a few months of activity, in ■which land salesmen felt that the good old days had returned, sales,fell off, and since then very few have been made, at all.

The experience of one stock agency lias been that very few farms indeed have changed hands ,most of the few sales having been brought about when legatees cf estates, anxious to get money and unwilling to take over the farm themselves, have sold to get ,ready cash. This sort of sale lias generally been in favour of the purchaser. Plenty of farms are for sale, but the value of the first mortgage is as a rule ’high,. and the owner naturally wants to get back some of the equity . over ' the mortgage. Thus prices have been inflated to a lev«l at which the prudent investor has been unable to see anything but loss. Sales. would probably have been much more frequent had it not been for the provisions of the Mortgagors Relief Act, which has kept many farmers on their places when mortgagees were anxious to get their money back, even in part. The Act still prevails and even without it firms have consistently advised against turning a good man eft his property. Under the Act very few farmers indeed have been allowed to go off their properties. Only when a holder has made no interest for three years, has made no attempt to meet his creditors, and appears to have small tTatnye of doing so, does the commission The number of farms thus thrown on to the market has been so small that -jt has made no impression on the general trend of things.

Oiie agent said that he had for 18 months been searching for a suitable place for a client who could produce £2-5,000 in cash. The client was very anxious to buy, but could find no property ‘ which was not hopelessly overvalued, even allowing for present wool and lamb prices, and assuming that they would hold indefinitely. Several other clients with amounts of £7OOO to 1 £IO,OOO in cash were on the bocks but the same remarks applied to them.

Oil the books of one firm there are actually dozens of' farms of all descriptions, but almost all of them are runs and fattening places are either not in the market or are valued at extremely high rices. Of a number of properties shown to a reporter, by far the largest proportion were valued by their owners at prices ranging round £8 a ew e for country which could fatten lambs, and about £6 a ewe for country which was purely a grvung proposition.

’ The figures for one place of roughly 1000 acres in a district where lambs could he fattened disclosed the usual owner’s valuation of approximately £8 a ewe. Working out returns on a generous basis for both lamb and wool, it was shown that a purchaser going in at the holder’s valuation, after paying 5 per cent on his outlay and providing for transport costs, rates, and other outgoings exclusive of those to work the place, would have to l,ive and work the property on a gross return of £l5O a year. , The instance quoted was not by any means isolated, the agent maintained. In fact, it was Vather the rule than the exception to Wnd circumstances of that nature. Investors generally were looking for an expenditure of from £4 to £5 a ewe\ .according to the country, and until selleiis or the buyers themselves adjusted,-|heir ideas of values the deadlock in market would remain. The position as it stood ns present was that therd was a bigger potential business in amral land than there had beeu for at Jeast two years, but the barrier of f ric « could jiot be overcome, and a deblock remained. ;

DOMINION’S WOOL TRADE New Zealand as a wool-producer had third place within the Empire and fifth in the world, with an output in 1982 of 116,000 tons, although sheep were reared primarily for meat. Like the United Kingdom, she has the 'best crossbreds in the world obtained by scientific breeding, and they give excellent wool as well os meat. These facts appear in a report . recently issued by the Empire Marketing Hoard oh fibres. The report,also reviews the world production and trade in cotton, silk, hemp, jute and flax, of which the importance in the native trade may be gauged by their estimated value of £1,195,000.000. ■ New! Zealand’s wool production iin 1.932 was double that of the United Kin-Mom, which receives SO per cent, of her exports. France was the next best customer, taking 6 per cent. Wool exports in themselves make up in value more than a quarter ’ of all. New Zealand’s export trade, but have to be added to those of South Africa and Argentine before equalling Australia’s output. Australia- han the largest sheep population in the world, and accounts for nearly one-quarter of the estimated total of the world’s supply or wool. Her sheep are mainly of the Merino type ancl are increasing in numbers. It. is noted in the report that during the slump Merino held its price* bitten that the crossbred. Worid wool is valued at £270,000,,COO, ar.d of that the Empire’s share !‘s nearly one-half. The Empire as a whole is an exporter on a very large scale, although the United Kingdom in 1932 absorbed more wool than any other country. She is the best customer net only of New Zealand, but also of South Africa and the Argentine, while one-third of Australia’s exports enter her ports. COMMODITY PRICES The price strength of London markets with.,regard to the Dominion’s export produce is far from unsatisfactory at the present time. Values have rot risen steeply or suddenly, but there, is a welcome firmness about prices which gives promise of a. reasonable. level of values when the new season begins. The demand for mutton and lamb has been fairly steady, and with regard to the latter experts regard the market as very encouraging, some authorities even going so far as to. suggest that there will be an improvement before the. export season opens. Beef prices at Smithfield have been a trifle lower than tor some time, mainly on account of the large supplies of chilled beef from the Argentine reaching the London markets. Pork remains firm at medium rates, but there has been a steady improvement in the demand lor l-acc-n pigs, Skins of all 1 kinds continue to; command payable prices, although the market, for rabbit skins lias receded slightly lately. Calfskins in particular are worth more to-day ;than they, were at the opening of the dairy season last year, and the prospects for “bobby veal” are brighter th.m was the case last year. TRE VALUE OF TESTING. The Swedish Government % doing excellent work in raising ih-b productive standard of the dairy stock of the country. It is doing this by the only reliable method, (basing the work ■of improvement on herd test figures. Swedish authorities realise, as do the best men in the herd testing movement of this country, that the data proved by national herd testing over ia series of years makes 'at possible to gauge with some degree of precision the value of individual bulls from a breeding point of view, that" is to judge their capacity of transmitting to their progeny tendencies towards valuable milking quality. In dealing with herd testing and quotas a 'Swedish Government report make 6 this sound statement; “At first sight it seem undesirable to endeavour just in such times as these -to incie.se the yield of domestic animals, seeing that one of the principal causes of the present agricultural ’crisis is considered, ; and rightly so, to be over production. It should, however, be ibornc in mind that it must always be more profitable to have good productive, animals than bad ones, as icosts of maintenance of the stock , are the heaviest items in the breeding of domestic animals- If it is desired to reduce production, the rational method i* to diminish the number of animals rather than to diminish the yield per .animal, And it is obvious that the greater the average, the greater the facilities for reducing the stock without affecting the total yield. EIGHT THOUSAND GALLONS The British Friesians, as a breed, are putting up some wonderfully goocr figures in the old country. Eleven cows at least have, passed the 2000 gallon mark each on four seperato and consecutive lactations. The last of these was Levenham Walleh 12th, which, at' nine year of age, has already produced over 10 tons of milk.