THE MEAT MARKET.

Taranaki Daily News, 16 April 1921, Page 7

THE MEAT MARKET.

GENERAL RETROSPECT AND SUMMARY. (Weddell’s Review.) The past year has been one of great uncertainty and exceptional difficulty in all branches of the trade. The transition from “control” to freedom has raised many unlooked for problems; and it is understating the case to say that much disappointment has been felt over the piecemeal nature of the process. Contrary to anticipations held a year ago, prices have not dropped to any material extent during 1920; and this result cannot be, dissociated from the direct and indirect consequences of control being maintained for so long after the need for it has passed. During the first six months of the year, the cold stores in this country, and the works in Australia and New Zealand were glutted with meat; but the Government, having complete control of these stocks, refused to reduce the general level of prices to any appreciable extent. They merely adjusted mutton and lamb quotations. In April, May and June, they relieved the immediate pressure of supplies in sight by selling largequantities of New Zealand lambs to the United States—to the ultimate disadvantage of the consumer at home. Later in the year, considerable lines of beef were re-exported to the Continent, and in that way the market was again relieved, and a substantial drop in prices averted in this country. When British meat was released from control on 4th July, farmers were placed in the satisfactory position of being able to resume trading on a market in which the values of imported meat were firmly held up by the Government. This accentuated the price-raising effects of the reduced marketing of home-grown meat during the remainder of the year.

The holding policy pursued from time to time by the Government was just what would have been expected from any financially strong speculator owning large stocks, and has certainly worked out successfully so far as profit-earning, or avoidance of loss, is concerned. The taxpayer has gained by the consumer being compelled to pay inflated prices for his meat. Food control has become a synonym for increased cost of living.' HEAVY BRITISH IMPORTS. Imports into United Kingdom ports were 90,000 tons in excess of any previous year in the history of the trade. As there were exceptionally heavy .stocks in store at the commencement of 1920, and as these had been reduced by 100,000 tons before the close of the year, there had been manifestly a very noteworthy increase in the sale of imported meats in 1920 over anything previously experienced. This is the more remarkable in view of the statement in the House of Commons made by the Food Controller in May that the national consumption had fallen off by 500,000 tons per annum, thereby leading to the great congestion at the stores! It was difficult to accept that estimate as reliable at the time it was made. At the end of the year it is impossible to reconcile it with the facts of the case. So large an increase in imports would have intensified the congestion instead of lessening it, had there not been a big expansion in the consumptive demand. On the other hand, it is against all pre-war experience to find that such high prices as those ruling did not check the demand on all sides.

The explanation of what is even now a puzzling position appears to be that, although home supplies of beef fell off considerabty in the latter part of the year (as the result of the excessive killing of calves during 1919 when veal was free from control), and although home mutton was exceptionally scarce (owing to the free marketing of ewes in 1919-20), the total consumption of meat has been maintained—but on somewhat new lines. Imported meats have been substituted by home-grown by many consumers in all parts of the country. The experiences of recent years, when all retailers were compelled to accept frozen beef, mutton, and lamb, have ap-pp.-entb’ created a taste for these descriptions and stimulated their sale through channels strongly biassed at one time in favor of home-killed. The extreme prices demanded for these latter have enabled retailers to dispose of increasing quantities of the relatively cheap imported meats, and with satisfactory results to all concerned.

The increased consumption of frozen meat in this country and on the Continent is also due in a large measure to the troops having acquired a taste for it when on active service, and asking for it after demobilisation, in preference to home-killed. The war destroyed the last remnants of prejudice against frozen meat in this country; and, on the Continent, it did the work of 20 years of peaceful penetration. EXPANSION OF DEMAND. . From the point of view of shippers, importers, and distributors, this expansion of the public demand for imported meats is a welcome development; and it is hoped that, with ,fresh supplies coming forward on private account, there will be a further growth of trade through these new channels.

Imports, which totalled 810,415 tons in 1920, a<s compared with 528,354 tons in 1919, 489,336 tons in 1918, and 720,257 tons in 1913, have recovered to the extent of 65 per cent, since 1918, and were 12| per cent, more than in 1913. Taking 100 as the index figure of imported meat values in 1913, -.the corresponding figure for 1920 was 240, as compared with 272 in 1919, and 295 in 1918. Wholesale prices have come down in each of the past two years, but to the extent of only 19 per cent, in all. They have not, therefore, receded commensurately with the increase in arrivals; and this is partly because the normally close relations between values and supplies have been rendered inoperative under control, and partly because of alterations in the course of trading brought about by the same factor.

Retailers are reported to have enjoyed a considerable measure of prosperity during the past year. Premises which had been closed during the war have been re-opened, but not m’any new businesses have been established. The prewar retailer of English meats has found a new source of revenue in supplying imported meats at prices which are attractively cheap in comparison with home-killed. The compulsory labelling of all imported meats has proved to be a blessing in disguise, if only because it gives consumers some assurance that they are being fairly dealt with. At the same time, a large number of people in many parts of the country, being in receipt of greatly increased wages, have purchased all kinds of meat freely, including a big percentage of prime English descriptions. Tn London, the proportion oi home-killed was only 21 oea> “ s

the quantities marketed, although the proportion, for the entire country was 56 per cent.

The number of cattle in the country has been reduced by 721,127 head, or 5.8 per cent., and sheep by 1,712,120 head, or 6.8 per cent, as compared with .the numbers recorded in 1919.

It is not easy to estimate the ultimate effect upon the home meat supply of this falling off in view of the abundant keep available for all classes of stock; but it is almost certain that marketings were much reduced in the last quarter of the year. On the other hand, the world’s export output of refrigerated beef, mutton and lamb, was fairly well maintained in 1920, the aggregate shipment for all overseas sources amounting to 1,056,000 tons, as compared with 1,103,000 tons in 1919; 1,141,000 tons in 1918\ 1,027,000 tons in 1917; and 767,000 tons in 1913. The increased outputs of the freezing works in New Zealand and the South American Republics were hardly sufficient to counter-balance the heavy decreases in shipments from North America, Australia and South Africa.

Of the world’s output in 1920, about 250,000 tons were shipped direct to the Continent of Europe, about 50,000 tons to the United States, and 11,000 tons to Eastern and African markets the balance of 783,000 tojjs being shipped to the United Kingdom, out of which 34,562 tons were re-exported to the Continent. NEW ZEALAND. . For several years past, the chief anxiety of producers and freezing companies in New Zealand has been to provide storage sufficient to meet the difficulties arising from lack of transport; but, with the assistance of monies advanced by the Government, refrigerated space has been increased from time to time, until the existing works are now capable of storing about 8,000,000 freight carcases, as compared with 2,000,000 carcases in 1913. It is unlikely therefore, that the question of storage will trouble New Zealand in the near future; and an important outcome of this policy is that shippers are now in a position to export continuously throughout the year, instead of during the season only, as was the position before the war. Although the slaughtering season of 1920 was a heavy one, no serious stoppage was experienced from lack of storage space, despite a handicap of 4,000,000 freight Carcases held in New Zealand at the beginning of the year. By the end of May, stocks in store were over 6.000,000 freight carcases, and for a time some works in the North Island became congested, but there was no prolonged trouble on this account. Thanks to the sale of the large balance of beef and “cut” ewes remaining in the hands of the Government at the end of October, excellent progress was made during the last quarter in clearing the works; and, at the opening of the new season, only about 1,000,000 freight carcases of Government owned meat remained unshipped. As the new season is unusually I'ate, owing largely to labor troubles, very, little privately-owned meat had been put through the freezing works before the end of December, and increased activity is, therefore, expected during the first half of 1921. At one time it was feared that the British Government would insist upon the entire clearance of their old stocks from the Dominion before allowing any privately-owned meat to be shipped; but an arrangement was ultimately fixed up whereby both may be shipperl simultaneously in the proportion of 20 per cent. * free meat in January and 40 per cent, in February, by which time it is hoped that all Gov-ernment-owned meat may have been sent away.

In the interests of the Dominion, it is desirable that all the privately owned meats should be carefully graded for quality on the pre-war standard, which was not maintained under the stress of war conditions. The opportunity presented of making permanent inroads into the trade hitherto held by homekilled meats cannot otherwise be taken full advantage of by Nev/Zealand shippers. FINANCIAL ASPECT. The termination of Government purchasing on June 30th was not welcomed by New Zealand producers with the enthusiasm that might have been expected, having regard to thejr numerous complaints of unfair treatment during the currency of control. The chief problem was, a financial one. Many of the cooperative freezing companies which came into existence just prior to, or soon fter, the outbreak of war, enjoyed a period of exceptional prosperity, with an assured market for all their products, and prompt payments by the Government; but some of these companies distributed the bulk of their profits, and now find themselves without sufficient reserves to enable them to stand on their feet in the coming period of competitive trading. It is apparently with a view to protecting the weaker companies from falling into the hands of foreign traders, that the New Zealand Government, notwithstanding much opposition, have adhered to the principle of giving no licenses to American houses to export from the Dominion. What was perhaps the most interesting feature of the past year’s trading, and one which was eagerly discussed on all sides, was the sale by the British Government of 2,290,746 carcases of New Zealand lamb and 348,941 carcases of mutton to North American buyers. The prices realised, although showing a profit on the f.o.b. purchase prices in New Zealand, were below the equivalent market values in England; but the Government, doubtless, made no loss on these transactions on account of the savings effected in storage, interest, and other charges. The chief object of these sales, however, was to relieve congestion in the freezing works in New Zealand and in the cold stores in this country, and, without doubt, that object was successfully achieved. Opinion in the trade seems to be divided as to whether or not America will become a permanent and important customer for New Zealand mutton and lamb. At the present moment the outlook is somewhat obscure. There is, undoubtedly, a seasonal demand for New Zealand lamb in the States; but a large proportion of the 1920 imports were still in store at the close of the year, and traders had become shy about making further large purchases before their old stocks were cleared up. Certain tariff legislation is pending which might effectively shut out "rom the United States all imports or but, even, if no tariff be imposed: *he factor of favorable exchange, which has entered so largely into recent transactions, is not likely to continue to operate against this country indefinite’".. With that handicap reduced, an’ : n<* restrictions at this end mmovefr h* United Kingdom will probably be p* l ” hitherto, to pay higher prices fhn.n America for the great bulk of the New Zealand output of mutton and lamb. CLEARING OLD STOCKS. At the close of the year, the stocks of New Zealand mutton and lamb available in London ware sot equal to the demand,'

and buyers were forced to take a much larger proportion of beef than usual. This was all to the good from the point of view of getting stale stocks cleared out; but the New Zealand lambs still in store in the United States at the end of the year would have found ready buyers in the old country at full maximum prices had they come here in the ordinary course of business. As it is, considerable lines of these diverted lambs were offered for re-exportation to the United Kingdom. The sheep returns at 30th April showed a disappointing drop from 25,828,554 head in 1919 to 23,914,506 head in 1920, a decrease of 1,914,048. After having been as high as 26,538,000 head in 1918, the flocks of New Zealand have ndw dwindled to the level of 1911. Last year’s decline is attributed to three causes, viz:—a low percentage of lambs from a reduced number of ewes in 1919, heavy mortality due to inclement weather in the spring of that year, and increased slaughterings in 1919 and 1920. The lambing season of 1920 was more favorable in the North Island, and there is every prospect of plentiful feed in both Islands; but if, in view of preseht high prices, the killing season should prove a heavy one, the number of sheep in the Dominion next April cannot be expected to show much, if any, recovery. Cattle at January 31, 1920, were returned at 3,059,44'5 head, as against 3,035,478 head in 1919 and addition of 23,967 head, despite the increased exports in 1919 and 1920. SOME STRIKING FIGURES. A revised list issued by the Department of Agriculture, shows that there are now 45 freezing works in New Zealand, having a combined freezing capacity of 4000 head, of cattle and 132,000 sheeji and lambs per day. Two new works are in course of erection, one in the North Auckland district, and the other on the East Coast, near Poverty This means that no fewer than 18 freezing works have been built in New Zealand since 1913, and that the theoretical exporting capacity of the Dominion has increased nearly 100 per cent, in seven years, although the number of cattle and sheep has remained almost stationary. Shipments from New Zealand in 1920 were the heaviest on record, amounting to 228,600 tons, of which 44,505 tons of mutton and lamb were directed to “other markets,” principally the United States,, the balance coming to England. The export figures for the past five years were as follow:

Mutton. Lamb. Beef. Carcases. Carcaees. Qrs. 1916 . . 2,506,697 3,239,030 743,000 1917 . . 1.956,405 1,527,197 620,000 1918 4 .. 1,564,916 1,377.846 524,456 1919 ; . 3,960,3'77 3,270,306 682,716 1920 5,023,935 4,322,961 556,903