THE PRODUCING SEASON

Taranaki Daily News, 22 November 1926, Page 11

THE PRODUCING SEASON

PROSPECTS DISCUSSED RETURNS MAY NOT BE SO BAD. SOME FAVOURABLE FEATURES. (From Our Own Correspondent.) Wellington, Nov. 20. If we take into consideration the various reports of damage by flood or by drought, and the market reports of ialljug prices, the outlook for the season docs not appear to be very good. But one may reasonably ask: “Is it as bad as-it looks?” Prices all round are no doubt lower than they were twelve months ago, but there would appear to be compensations. , . Dealing first with dairy produce, it is difficult to know what is the policy of the Dairy Control Board. The cable messages from Loudon have not been sufficiently clear as to a settlement with the dissatisfied sections of the trade. We must realise now that although there are many producers in the Dominion, there is - practically- only one seller of New Zealand butter and cheese, and that* the Dairy Control Board. We must not therefore be surprised if the future development results in there being one buyer for our dairy produce. Already there exists a New Zealand Produce Importers’ Association in London, and the operations of this association eould easily develop into a buying organisation on behalf of the members. In considering the future of the butter market the operations of the Dairy Control Board must be taken into account, for if there is not smooth working with the distributers the market may receive a set-back. The prices of controlled butter have continued at 150 s for finest, and 148 s for first grade, since they were named, now nearly a, fortnight ago, and, as at intervals it was reported that very little butter was selling and that the market was stagnant, a revision downwards of the “named” prices seems probable. The dairy producers are already badly affected by the lower values ruling as compared with last year, but there is compensation in some districts owing to an increased output. Apart altogether from what may happen through the operations of the Dairy Control Board, it cannot be overlooked that the purchasing power of consumers is much restricted as compared with last year. The settlement of the coal miners’ strike must make some difference to the markets. With the resumption of coal mining a great number of other industries will be able to resume, and that will mean increased employment and wider spending power. Too much, however, must not be expected from this, for the losses of the past eight months have been very serious and very real, and there can be no extravagance. Even if there is no actual improvement there should be a wider demand, and therefore a quicker clearance of stocks. What applies to butter applies with the same force to frozen meat. The wool market shows a decline ol about oite penny per lb, and if this is maintained throughout the season this will mean a loss of 40s per bale, or about a million sterling on the year’s elip. But who can venture upon prophecy in respect to wool, which, unlike butter and meat, has a world wide demand?. In November, 1924, wool prices were absurdly high, and these prices were not repeated. It was the result of the trade acting upon unreliable statistics.

In November, 1925, prices were very considerably lower than the average of the previous season. Nevertheless the prices for that month were the best of the season. Bradford suffered heavy losses -because of the high prices paid in the season 1924-25, and has since suffered very severely because of the coal strike, and the keen competition from France, Germany and Belgium. It whs stated recently that Bradford wanted tljp raw material at a reasonable priee.

The word "reasonable” is capable of wide interpretation, but, as Bradford operators were the principal buyers at the opening sale of the season, we may fairly conclude that the prices at the Wellington sale were reasonable. This points to’ the probability that wool has touched bedr'oek, and With the improvement in the trade outlook because of the finish of the strike, it is not unlikely that prices will move upwards under increasing competition.