£7,000,000 GAIN

Waikato Times, Volume 125, Issue 20988, 15 December 1939, Page 9

£7,000,000 GAIN

NEW ZEALAND’S OUTPUT

RECORD SEASON FORECAST EFFECT OF PRICE INCREASE Two factors influence our exports income, quantity of productions and commodity prices received therefor, writes Mr H. A. Seifert in the New Zealand Financial Times. Each year, as the months pass, we learn from statistics published what income the country has received. In so far as sound estimating will allow, it is equally desirable to have some idea of what are the prospects ahead. To this end, the wartime commandeer has been an aid, for prices are now determined almost over the whole field, thus eliminating one most varying influence. There has, however, been much heard of declining production. In answer to this, the writer must ad - vise that he finds little prospect of any material lowering of export production for this season, as compared with the one before.

At the same time, it is desired to make absolutely clear that this is not to say all is well with farming. Very far from that is the true position. However, that position is not here our present concern, and so comment thereupon belongs to another occasion. To most, the conclusion reached will come as a pleasant surprise, for this is seen—a high probability of this season’s exports income attaining the record height of £66,000.000 (N.Z. currency). Pastoral Productions As at April 30 last, a decline of over 500,000 sheep was recorded from the record flock numbers of the previous year. This decline was, however, more apparent than real; for the season before figures were inflated by late fattening. The true position this autumn was actually stronger than ever before, in that breeding ewes, the real, producing stock, were present in the greatest number and proportion yet recorded.

As at the end of winter, however, the position had worsened, due to exceedingly severe snows. These were cause of serious losses in the high country of the South Island. This will lower our wool output. Strangely enough, the dry autumn and backward spring have had little bad effect upon meat output. Giving consideration to sheep statistics as at April 30 showing 1% per cent reduction and allowing for snow losses, a maximum decline of 4 per cent is estimated in numbers of sheep shorn and to be shorn this season. Additional to that, a 6 per cent reduction in weight of wool shorn per sheep is estimated owing to light growth during the year and lack of grease at shearing. Lighter Wool Yield In all, a 10 per cent lighter national wool yield is seen. This represents 31,000,000 lbs, or 90,000 bales, worth £1,650,000; against this is to be set the benefit of lb increase in price due to the “commandeer.” This on a full, normal clip would provide £4,125,000 (wool on skins and slipe wools are included). The nett result is that our wool will provide £2,500,000 higher export return. Over the whole range of meats, an export equalling last season’s is looked for. The steadiness of this production has proved quite remarkable over the past three years, varying within a maximum range of 2.62 per cent from highest to lowest return.

For the current season a lower ex- j port of both beef and pig-meats is | allowed for, but an increase in fat lambs will counterbalance this. For j purposes of convenience, pork output is here included, although that is ! truly a dairy product. Turning now to the price level, a | more complicated scene is met. Un- | der the commandeer, meats have ! fared varyingly, beef and pig-meats rising negligibly, lambs to a fair degree and mutton notably. Overall, a **ise of 10 per cent is obtained, on a “weighted average.” (This takes cognisance of the relative quantities of products as well as of their percentage rise.) The nett effect will be to add £1,500,000 to the value of j this season’s exports of all meats. Apart from meat and wool, the j pastoral industry provides an export j approaching £3,750,000 in hides, , skins, tallow and sausage-casings. Allowance has been already made for wool on sheepskins in estimating wool clip returns; this disposes of say £750,000 of our by-products, leaving £3,000,000 to be now considered. Having regard to the nature of the products and their past level of prices, it is estimated that these will appreciate on average by 15 per cent, thus adding £450,000 to our export income. Dairy Exports The number of cows milked in the Dominion had by last January 31 declined by just on 100,000, or 5J per cent from the peak figure of a few years earlier. The view is now held, however, that this declining trend has ceased and that as many cows are being milked this season as last: or if there be any decline, it is very slight indeed. Climatic conditions, however, can affect dairy output in marked degree—to a far greater extent than seen in our other major export pro - ductions. In one season a 1 per cent decline in cow numbers was accompanied by a 13.25 per cent drop in output. Movements up to 10 per cent are not rare, and of 5 per cent are quite usual. In comp.t ing this with last season, account must be taken of last season’s unsatisfactory conditions, that i educed output substantially. To date this season has been equally unsatisfactory, but an improved summer and autumn may be locked for. This , iew is expressed, “not as a weather j prophet, but as an actuary.” On these grounds, a 3 per cent ' greater output per cow is allowed for, •nd for safety’s sake a 1 per cent owering in herd numbers, thus providing for 2 per cent increase in proluction, worth £500,000. The “com- j nandeer” prices for butter and cheese .vill add another £2,000.000 to our ex3ort income. As a net result, our iairy exports should provide £2,500,JOO higher income this season, compared with the one past. Land Sundries Under what may be termed ’’land sundries,” last season provided £l.JOO.OOO of exports. Here are such riiverse items as fruit, pasture seeds, •phhit.skms and New Zealand hemp.

As our fruit export is somewhat in jeopardy it is felt needful to-allow for a £300,000 reduction in this. Also one of £50,000 on “general account,” mainly on account of pasture seeds. On balance of items some price increases should counter any lowering of output and any contingencies unforeseen. Under “sundries,” a further £2,000,000 was provided; here are grouped such items as coal, opossum skins, timber, kauri gum. fish and gold. Apart from the precious metal, all others provide just about £500,000 in exports, and this figure may be assumed to be repeated for the current season. Gold has risen in value by 13.3 per cent at date of writing, compared with August last. It is estimated that production will be greater than last season by fully 10 per cent. Allowance is therefore made for an increase on this account of £455,000 in export income. An export of £1,000,000 is provided under heading of “unspecified,” which covers a wide range of minor j shipments. No change in this figure is allowed for. £7,000,000 Gain For the season ended June 30, 1939 (the production year), our export in- : come was £58,851,000. This was just £6,500,000 or 10 per cent below our | record season of 1936-37, when exports reached £65.400,000. Incidentally. that figure was £20,000,000 up on ! four years earlier, the depression 1 period. [ For the current season we see exports raised £2.500,000 by wool, £l,500,000 by meats, £450,000 by meat by-products, £2,500.000 by dairying, and £455.000 by gold, a total of £7,405.000 in gains. To be deducted from this is an allowance for losses of £350.000: account of “land sun--1 cries.” The net gain, therefore, is oi £7.055,000. Should this be realised, our export income for the current season will amount to the great sum of £65,906,000.