COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LX, Issue 132, 4 May 1940, Page 4

COMMODITY MARKETS AND PRICES.

FARM PRODUCTION. 1 (By “Benloo.”) New Zealand dairy-farmers and pigfarmers have now, it is stated; a wonderful opportunity to expand production because of the elimination of Denmark as a competitor in the British market, through the invasion of that country by Germany. Under normal conditions of production this would hold good, hut the conditions in this country are abnormal. Mr Hale, the chairman of the Dairy Board, stated in Palmerston North the other day that production had been falling during the past three seasons because dairying under to-day’s high cost and conditions is less attractive than iormerly. The present season’s small increase is not due to any increased popularity in dairying. Symptoms that caused a decline in past, seasons are still here, and unless particularly favourable climatic conditions arc experienced next season there is likely to be a downward trend once more, despite all the efforts which, farmers may make to increase production* That is straightforward, ' Dairyfarming. like other enterprises, is controlled by economic laws, which are proof even against patriotism in wartime or any other time. The contention of the dairy-farmer is that dairying is not as profitable and therefore not so attractive as formerly. Even guaranteed prices which gave to the farmers returns higher than they would have obtained in open market prices have failed to stimulate pj’Oduction. The high costs run away with the bulk of the profits that should come- to the farmer, and lie feels that he is not working for himself and liis family but- for others. The farmer is asked to increase production with the hicrh costs continuing. Ts it reasonable to expect him to comply with this request without reducing costs: Tt is not onlv the dairy industry that has to struggle along with high costs for all local industries are affected in the same way. But there is this difference —local manufacturing industries have a double protection just now bv the tariff and import restric-tions-/the dairy farmer has no such protection. The guaranteed prices were supposed to compensate him lor the

higher costs, but when he asked for' prices that would really compensate him, and which were recommended by the Advisory Council, thev were refused. To increase production, the conditions necessary for bringing about that increase should be examined, and the farmer given a real opportunity of showing- what he can do in a time of national need. The farmers as a whole are just as patriotic as an> other section in the community, but it is unreasonable to expect them to demonstrate their patriotism by monetary loss oil a big scale. *»IG PRODUCTION. The Controller of Primary Production (Mr A. H. Cockayne) has made an appeal for an increased production of pig meats, and he bases his appeal on patriotism. He went on to say that the events of the last few days plainly show the urgency and stark necessity of increasing our output of bacon to fill the gap left by Denmark’s disappearance as a supplier or pig-meats to Great Britain. When it became very clear that supplies of bacon were not to 116 expected, from Denmark, the British Food Ministry promptly entered into an agreement with Canada to supply about 1,900.000 cwt. of pig-meats, and Canada has consented to do this. Canada can carry out the contract, for in addition to her own facilities for production she can draw upon the Uuited States for supplies. The domestic consumption of pigmcats is quite 25 per cent., more than is available; hence, what is. available is expensive. The demand is greater than the supply. Pig-meats' should he about the cheapest of meat because of tlie fecundity of the sows, but instead bacon, hams and pork arc expensive luxuries. The fundamental problem is-'Die question of costs, and the Controller of Primary Production must he aware of that. Every class of farming is suffering from high costs and diminishing profits. These industries must operate on sound economic lines, and that is what they are unable to do just now because the control of costs has been taken away from them. These matters will no doubt be adjusted later TRADE RETURNS. The trade returns for the first quarter of the year show how severely the trade of the country has been affected by import restrictions and exchange control. The imports during the three months amounted to £lO 058,000, as compared with £13874,000 in the corresponding period of 1939. by which date import restrictions had been in operation for about four months. The decrease is equal to £3.800 000, hut if one compares the figures with those of 1938, when there were no restrictions. the decrease amounts to £4 820 000. Yet, in face of this, the restrictions for the second half of the year have been made more severe. Ol course this interference with the normal flow of overseas trade is literally taking the bread out of the mouths of a great many people, who are becoming impatient and resentful. Exports, on the other hand, show an increase of about £1,700.000 on the figures of last year, hut these must he accepted with reserve because shipments of produce do not go forward with any regularity; but no doubt in the first quarter of this year special efforts were made to get the produce awa.v because of the war. However, the ‘fact remains that our imports in the first three months of this year were valued at less than half the value of our exports. It may be contended that a correct view of the situation cannot lie obtained by a survey of the figures tor three months, and so there can be taken the figures for the twelve months to the end of March. The imports for the year to that date totalled £45 571,000, as compared with £54 409 000 last year, and £SB 065 000 in 1938. Thus, ’ compared with last year, there is a decrease of nearly £9,000 000, and compared with 193 S the decrease is nearly £l3 000 000. The object of import restrictions is to build overseas funds, and the po'ition ot these funds on March 25. the latest date for trading hank retirns, shows as under: Trading hanks £l3 066 903; Reserve Bank. £13.038,980; total. £26 105 883; B”it : sb credit, £5 000 000 ; aggregate, £3l 105 883. Actually, on the cla + '' mentioned we had available over £3l 000 000 of overseas credit, or ov°" £26 000 000 if is omitted the credit granted bv the British Government. This, it is contended, is more than sufficient for war punioses, hut, apparently. the authorities think otherwise and now it would he interesting to know at what level the over- I seas funds would ha eoiridered safe to permit of normal trading.