HEAVY LOSSES

Sun (Auckland), Volume III, Issue 849, 18 December 1929, Page 12

HEAVY LOSSES

N.Z. FREEZING INDUSTRY OVER £1,000,000 LAST YEAR

By

“NOON CALL”

Concern has been expressed in many quarters over the past three months as company after company engaged in the freezing industry has published a balance sheet, and, in practically every instance, shown a loss on the year’s operations. The trend is such as to suggest emphatically the need of an immediate reorganisation within the industry. In practically every instance, where an attempt has been made to explain the losses, the reason given has been substantially the same—competition from proprietary concerns has forced prices for stock to such high levels that the freezing companies concerned had either to buy at a loss or close down. The latter course, in addition to involving the loss of established connections, would have entailed heavy overhead expenses, which might easily have been greater than the actual loss on trading. Even in cases where cooperative concerns did not engage in buying, dealing only on owner’s account, competition from proprietary concerns proved detrimental to turnover. GROWTH OF PROPRIETORY INTERESTS The Auckland Province, a district which shows every indication of doubling its production of fat stock within the next ten years as a result of more intensive farming methods, now relies for a market almost entirely on proprietary concerns. In Poverty Bay, one of the richest stockraising districts in the Dominion, one large works has already fallen by the wayside, and, speaking in regard to the remaining co-operative concern, the chairman of directors recently announced that “the writing is on the wall”; unless there was a rapid change for the better the company would not be able to carry on. In Hawke’s Bay, two proprietary works are firmly established. The farmers’ works at Masterton is controlled by one of the two overseas proprietary concerns which are operating extensively in New Zealand. This firm, starting with works in Taranaki, now operates over the whole of the North Island. It is firmly established in Canterbury, and only recently completed arrangements whereby it will have virtual control of the works of an Otago farmers’ company. Thus it can be seen that although there are only two overseas concerns operating extensively in New Zealand, they have gajned a foothold in every important stock-raising district in the Dominion, and everywhere farmers’ freezing companies are up against cut-throat competition, backed up by strong selling organis_ations in the world’s best markets. Up to the moment, the farmer, and the Dominion as a whole, has benefited. There is no doubt that the keen competition of the past few years has resulted in the producer receiving a bigger price for his fat stock than would have been the case under less keen methods of doing business. There is the future to be looked at, however. COMPANY CHAIRMAN’S VIEWS Dealing with this aspect of the question, at the .annual meeting of the Canterbury Frozen Meat and Dairy Produce Export Company, the chairman said:—“lt may be argued by the farmers that as long as they are getting high prices for their stock all is well, but I would urge them to take a longer view, and consider the future of this most important business, the frozen meat trade of New Zealand. Should conditions such as obtained last season be allowed to continue, and organisations like ours, formed with New Zealand capital to foster and build up this vital trade, be forced to cease operations, very little imagination is needed to picture the result. Our lamb trade would be in the hands of two or three huge overseas concerns, and our products would be worth just what they decided to pay for them, probably cut down to a price which would enable them to undersell thei.r rivals dealing in inferior meat at the other end of the world. “You may think that this view is a pessimistic one, but when it is realised that the estimated losses of those engaged in this trade for the past year are well over a million sterling, it will be apparent that the position is a serious one, and cannot continue indefinitely. “In this connection, your board has viewed with grave misgiving developments which have recently taken place in the control of certain freezing works. As you know, the Maste.rton works are now the property of an overseas firm, and the control of the output of the North Canterbury and another company in the South has lately passed from the hands of the shareholders. All these developments tend toward the elimination or reduction to helplessness ,of the locallyowned companies. The tendency is borne out by the fact that in the "last ten years the output of New Zealand lamb directly controlled by overseas firms has increased by practically two million carcases, or over 300 per cent. This is one direction in which wfe think the Meat Control Board might be of great help to its constituents.” Under present conditions, even the proprietary concerns cannot have escaped without losses. History hap repeated itself, in fact, showing that unchecked competition and price-cutting is not conducive to healthy industrial growth. It seems, therefore, that there is much in the suggestion that there should be a general “getting together” within the industry, with a view to arranging for co-operative price-fixing on an equitable basis, and generally endeavouring to place the industry on a sound footing. Such a suggestion has been carried out with most satisfactory results in other sections of industry.

A BOUNTIFUL SEASON CONDITIONS IN THE WAIKATO From Our Own Coiv'cspondent HAMILTON, Monday. Hay and ensilage making in the Waikato is in full swing. Owing to the phenomenal growth of grass this spring ensilage production is bc-ing undertaken on a widespread scale and many farmers are laying in a stock of ensilage in preference to hay. Being independent of -weather conditions, ensilage production can be attended to at the time proper to the welfare of the pasture growth, whereas if good haymaking weather were waited for it might be impossible to carry out the earlier mowing. The latter allows, before the advent of dry midsummer, for the development of the second growth, which is so valuable as a source of fresh young forage which it is somewhat difficult to secure otherwise at that time. Haymaking will proceed during the next month or so while topping and harrowing operations -will also be commenced by some farmers. With favourable summer weather a record season for dairying seems highly probable.