TARANAKI LAND VALUES

Taranaki Daily News, Volume LIV, Issue 285, 29 May 1912, Page 3

TARANAKI LAND VALUES

ARE'THEY TOO HIGH? We recently published a letter written j to the Ilawera Star by Mr. Walter Powdrell, a big landowner, who sought to justify the big prices being paid for land in the southern part of the province, going so far as to predict that the same ' land would shortly rise to over £IOO an I acre. j

Mr. Powdrell's statements and estimates have been vigorously attacked in the columns of the local paper. One writer says:— . "It is well known now that the exI ceedingly high price of cheese this year is caused almost solely by the great drought in the Northern Hemisphere last season—the biggest drought experienced there for 50 years. It would be as well to warn fanners that this past season is in the nature of a boom year, and that we may not see cheese so high on the London market for a great many years to come. This drought has lielp- . Ed to inflate land values, but farmers | should not take any man's word that this season's high prices for butter-fat 1 will be realised regularly. Much better \ ■ take the average for the last 10 years, ■ and work out land values on this basis, j Mr. Powdrell bases the whole of his 1 I argument on the present price of but-1 j ter-fat. But as. Taranaki .farmers have j I not the slightest control of future prices on the London market, I fail to see how present prices can be taken as a failbasis on which to calculate the value of land. In conclusion, I would say that your correspondent has taken great pains to present the best side" of the; picture, but has carefully omitted all J reference to factors such as bad sea- ! sons, low prices, and the various dis- j eases of cattle, all of which tend materi- I ally to reduce dairymen's profits." J Another writer says:—"l would like to point out a few statements that are ! misleading, taking Mr. Powdrell's own figures as a basis for argument. If a 50-acre farm is bought at £BO per acre, and its carrying capacity is a cow to ) 1 % acres, it will only carry 32 cows in- j stead of 34, as Mr. P. has only allowed { half an acre for one cow, and has not j I allowed for a horse to take the milk to I the factory, which means two acres less I for the cows, and consequently £24 less 1 return. To buy 32 cows to average J 2401b butter-fat means an outlay of £384, or £l2 per cow; horse, dray, harness, cans, etc., say £SO, making a total expenditure of £434. Interest at 10 per cent., £43 8s; depreciation on 32 cows, horse and plant, at 15 .per cent, (which is on the low side), £BS 2s; | labor, 40 per cent., or two-fifths, £153 [ 1 12s. Whether this is hired or not does { not affect tlie issue, as the labor has to I be paid before tlie owner can estimate j his profit.. Interest on price of land, J £4OOO at ( 5 per cent., £200; returns > from factory, at Is per lb butter-fat (which is a big average for a term of years), 2401b per cow, £384; calves and pigs, allow £2 per cow, which, I think, is more than the average farmer makes, £64. Total expenditure, £457 2s; total receipts, £448, leaving the owner £9 2s short of his wages, and no profit, which would not suit me, if it does Mr. P. You will notice that Mr. P. has only allowed £SO interest and depreciation on his cows, instead of £lO3 10s. I will allow practical dairy farmers to judge which is correct. . Mr. P, must have a marvellous imagination when he says that the farmer gets his house, meat, milk, butter, fowls and. potatoes practically free,' as this is quite fmpossible unless lie steals them."