NEW ZEALAND'S OUTLOOK

King Country Chronicle, Volume V, Issue 390, 26 August 1911, Page 5

NEW ZEALAND'S OUTLOOK

| In the course of a faw weeks the ! producers of New Zealand will begin j their profit-taking, and it is interesting therefore to endeavour to estimate the prospects. The prosperity of the Dominion of New Zealand depends very largely, if not almost entirely, on ths products such as dairy produce, frozen meat and wool. We ought to be able to include agricultural products, but unfortunately New Zealand is incapable of doing much in this respect for a variety of reasons which need not now be specified. The outlook for dairy produce appears to be good, and were we to place full value on the optimistic statements of those interested in the trade the outlook is j exceptionally good. This view is

based upon the fact that Europe has suffered from adverse climatic conditions, and there has therefore been a lessened output. But the tendency

here is to exaggerate this feature, and

I to attach an undue importance to it. I The two butter exporting countries of Europe are Denmark and Siberia. France and Germany do a litt ; e exporting, but their totals are insignificant. The drougth does not appear to have made very great difference notwithstanding that several steamers have been unable to discharge their cargoes owing to the strike of dockers. Comparing the prices or periods twelve months apart we get the following:—August sth, 1911: Danish, 112a—August Gth, 1910, Danish 112s. Siberian 109s—101a. Australian 112s in 1911. There is a difference of 10s in favour of Danish and Ss in favour of Siberian but it is obvious that these margins would be greatly reduced, if they did not disappear altogether, so soon as the steamers held up by the strike are released. Furthermore it must be remembered that in Denmark artificial feeding is resorted to, and the Soya bean from Manchuria is supplying the dairymen of Denmark with a comparatively cheap oil-cake. However the position of Denmark butter is really of little moment, what concerns us more is the Australian output. Last season the Commonwealth sent an enormous quantity of butter, and much of it was classed equal to New Zealand, indeed some wholesale dealers gave the palm to Victorian butter and advertised the fact. The Commonwealth is promised another good butter season, and the new make is already going forward. It id the Australian output with its improving quality that will affect New Zealand butter, and affect it to the extent of preventing any undue advance In values. Messrs W. Weddel and Co., Ltd., of Lundon, who may be accepted as authorities on the butter market anticipate higher prices for colonial butter this season. This statement is apt tn mislead one unless carefully examined. What Weddel and Co. no doubt mean is that the London prices will be higher than last season and there is every probahiltiy of that, but it must not be forgotten that the London prices last season left most of the dealers with' a loss on their New Zealand purchases. It is hardly likely that they will care to repeat the experiment this season, and furthermore they occupy a somewhat independent position now, because they can look to the Commonwealth for supplies. Thus while London prices may be a shade higher on the average than they were a year ago it does not necessarily imply that the factories here will get higher prices than they obtained last year. It is difficult to say much about cheese, for here is no authentic information available as to what Canada and the United States are doing. The season has not been unfavourable in the two countries named for both except bumper crops of cereals. If we turn to the wool market the outlook can be said to be not at all bad. There will again be an increase in the output of Australasia, tor we incline to the view that New Zealand will not again show a deficiency. An increase may also be expected from South Africa where the quality of wool produced shows decided signs of improvement. The unknown factor in the wool situation if the final character of the America tariff. On June 1 a caucus of the Democratic members of the United States House of Representatives agreed to alter the tariff in respect of the wool schedule from specific duties to ad valorem. Instead of (id p«ir lb on greasy crossbreds, and on merinos, they fixed upon 20 per cent ad valorem, and if that alteration were given effect to it would inevitably change the character of the United States trade materially. With an ad valorem duty and that duty really cut down by more than half one-, Americans will be much more general buyers. There is pro- ; mised a record cotton crop this year ( and the effect of cheap cotton on wool must be taken into account. On the i whole it seems likely that present : prices will be maintained, but in the event of the American tariff being modified higher values will certainly rule. i

With respect to frozen meat it does not seem probable that prices will harden. The European shortage of which so much has been heard is with respect to beef, and of this commodity New Zealand has comparatively little to export. Mutton and lamb will more than ever be affected by Australian competition, for we may be sure that the exports from the Commonwealth will be on a large scale. The prospects of opening up trade with the Continent are not very great,' for as already pointed out it is beef that is in demand and not mutton and lamb. However, if prices all round are no higher than in the season just ended, there should be compensation for our producers in an increased output which will be much needed, to coanter act the decrease of this year.— 'Mercantile Gazette."