Diminishing Returns Despite Increased Production

Manawatu Times, Volume LV, Issue 7027, 10 December 1932, Page 3

Diminishing Returns Despite Increased Production

Primary Producers 9 Difficulties Farmers 9 Distributing Co . Meeting Chairman 9 s Annual Review

The unnual meeting of the shareholders of the New Zealand Farmers’ Co-operative Distributing Coy., Ltd. was held at Fcilding yesterday afternoon, Mr. Thomas Currie (chairman of directors), of Wanganui, presiding over a good attendance. In his address to shareholders, Mr. Currie said: “For The past two years this report has alluded to the diminishing returns received by our primary producers, and p is a regrettable fact that'during the period now under review, the position has become even more acute, despite our increased production. The unprecedented fall in prices has caused widespread ruin with disastrous social and political repercussions throughout the world, and until some solution of the problem of reparations and war debts is found, it appears unlikely that any material improvement will be shown. While some small relief has been forthcoming in the matter of interest, and other charges the fact remains that our prosperity is entirely dependent upon riie state" of the world’s markets, and it is difficult to seo how any internal adjustment can right the position as tar as this Dominion is concerned, although a further fall in the rate of interest and a reduction in taxation would undoubtedly "be greatly appreciated.

return to growers is over £OOO,OOO less. The position is further emphasised it compared with 1930, when the exports were 553,298 bales, valued at £8,150,309, a fall in revenue of over £2,000,000, although over 108,000 more bales were exported. The New Zealand selling season of 1931-32 opened ns in the preceding season, at Auckland on November 28, followed by sales at Napier and Wellington in December, 1931.

The greater portion of the offerings at the opening Auckland sale comprised old wools and these-, in addition to being of indifferent quality, opened up for buyers’ inspection most unattractively, being badly discoloured, unskilled and seedy. A very low range of values ruled at this sale, but it was generally conceded that as tho offerings were of inferior quality, a true index of the value likely to rule,, when a more representative offering was catalogued, had not been afforded.

At the following Napier sale, a more attractive selection was submitted, with new season’s clips predominating, and a distinctly better tone in the market was apparent with competition coming from all sections of the trade. When catalogues comprising 22,300 bales were offered by Wellington brokers on December 8, a full bench of buyers was iu attendance and bidding was animated and well spread at values on a par with those ruling at Napier. Many growers had failed to realise to what extent crossbred wool had declined in value and as brokers were hampered by high selling reserves, which in practically every instance were considerably above ruling rates, passings at auction were consequently frequent. Any lots of the preceding year’s clip offered, and these comprised a fair percentage of all catalogues, met with a good reception from buyers, especially those lots which had been carefully classed and showed very little signs of discolouration. Bradford representatives purchased the- bulk of the wools sold, with Continental buyers strong competitors for lots suitable for their trade. Fine wools were in short supply and under keen competition from all sections of the trade sold readily at from 8d to 9Jd per pound, and Romney hogget of super duality and style was also in good demand, a few of the specially choice lots wo offered selling at from 7d to Bid per pound. The range of values was as follows: Strong crossbred, iiid to 4ld; medium, to Gd; line, to 7d per pound, very disappointing prices truly from a grower’s standpoint. In January, Continental buyers were much in evidence and purchased the bulk of the line wool, also the lion ’3 share of the skirtings and oddments offered. Japan and America were interested to some extent, but it was early apparent that Bradford limits for topmaking sorts had been considerably reduced. Little change in values of crossbreds were discernible, but - skirtings were distinctly dearer than at first sale and super fine Romney hoggets also sold at higher figures, the range of prices for this description being from Sd to 9d per pound. Values Below Production Costs.

Farming in these times is a sivious business, for tho disappointments and uncertainties which invade every phase of rural life to-day tend to discourage even the most stout-hearted, but 1 believe the New Zealand farmer to-day is as courageous as the early pioneer, and will yet win through despite tho present discouraging outlook. The chief lesson to be learned from the present depression is that the war-time level of prices, wages, profits and interest is a thing of 1 be past, and that a new level is in the course of being established.

Disastrous Wool Season. Our overseas shipments of wool for 12 months to Juno 30 last totalled CG1,911 bales valued at £5,552,885, as against 048,030 bales for the previous year valued at £0,195,127; so although 13,000 more bales were exported, the

From February sale to the cud of the season a steady decline in market values can be reported, except for fine wools, and the average price realised at the concluding sale of the season held in April last constituted the lowest ever recorded at a Wellington sale. Thus ended the most disastrous season ever experienced by North Island wool growers, for never at any period did selling values approach within reasonable distance of production costs. Unfortunately another heavy carryover has to be recorded, which, added to the preceding season’s, makes a total at June 30 last of 210,000 bales of greasy wool held in the Dominion, practically all of the North Island portion of this total being inferior to medium top-making wools, for which no great demand exists at tho moment. London May sales showed values of New Zealand crossbred at an extremely low range, and growers were delighted at the news of the marked recovery shown in the July scries from the Jow basis established in May. (September London sales showed a further improvement in values of crossbred with better spread competition from all manufacturing centres, and in spite of the heavy carry-over both iu the Dominion and Argentine of this description, it is reasonable to anticipate some improvement in values of wool during the coming season.

I would desire to emphasise the necessity of growers paying more attention to the get-up of the new clip than in the past, as there is no doubt that buyers pay more attention to carefully skirted and classed wools than to farmers’ parcels of mixed qualities, with skirtings and bellies left on the iieeces.

The current New Zealand selling season opened at Auckland on the 2nd. inst., with prices showing no appreciable improvement. The demand for fine wools was a little better, but medium and coarse and held-over wool met with poor competition, a result which rather emphasises tho fact that growers have been ill-advised in not meeting tho market in tho past, and it is to bo hoped that tho bulk of the holdover wool will bo disposed of this year. Slump in Meat Values. Frozen meat trade: According to tho Meat Board figures tho following totals comprise the shipments from tho Do-

minion compared with the corresponding figures for the previous year:— Sept. 30, Sept. 30, 1932. 1931. Carcases. Carcases. Lamb .... 5,891,735 7,824,937 Mutton .. 2,913,737 2,478,978 Beef (qrs.) 195,312 135,539 Pork .. .. 147,029 133,754 B 0 n e le- s s beef, bags 233,357 119,445 These figures indicate an increase of about 1G per cent, in volume of our shipments, but the monetary return on the other hand shows a further decrease.

.Schedule prices in the Wellington province last year utrc very disappointing, the opening price of 7d for early lambs dropping to ssd in NovernL>cr, s]d in December, and later reach the low level of 4ld. The average price for fat ewes was round about Vs. and for fat wethers 12s.

Tho season, however, started at a very much better level than for the present one, as the schedule has opened at the extremely low price of 4Jd. ft is to be hoped, however, that the market will shortly show some improvement, as the benelits likely to result from the Ottawa Conference have not yet been reflected in the markets.

Smithlield has been overloaded with Home grown stock, prime (Scotch hill lambs selling as low as 5d per lb.; it is anticipated, however, that by the time our early shipments reach London, stocks of Home grown will be cleared. Dairy Prospects Perturbing.

Dairy produce: Increased production is again evident from the- figures of the total gradings from August 1, 1931, to July 31, 1932, viz.:— Butter: 1931-32, 104,211 tons; 193031, 97,03.1 tons. Cheese: 1931-32, 85.194 tons; 193051, 59,229 tons. This works out at an increase of 7.4 per cent, in butter, and a decrease of I.IG per cent, in cheese production, or taking the returns on a butter-fat basis, there is a general increase in production of 5.285 per cent., as compared with last year. The London market price for butter reached a record low price in May, when 93s was quoted. Opening in August, 1931, at 108 s to 112 s, prices rose to 122 sin October. November saw values recede to 104 s to 108 s, and in January to 04s to 975. February and March witnessed recoveries to 110 s to 113 s, hut April aud May brought a heavy decline in values to as low as 935. By .July prices had firmed to 100 s, reaching 107 s by tho end of that month. Cheese prices have not been subject to the same variations in value as butler, October seeing the highest point to G9s to 71s, and December the lowest at 54s to 5Gs.

The following schedule of average London prices for butter and cheese for the past live years illustrates the extensive drop in realisations: — Butter. Cheese.

Increased production in competitive countries and tightened restrictions at foreign importing centres, have accentuated marketing difficulties and prospects for the coming season are most perturbing, prices having fallen to 84s, a figure spelling disaster for our dairy farmers. Live Stock Returns. The annual live stock returns as at April 30, show a decrease of over 1,000,000 sheep, when compared with 1931, and over 2,000,000 less than in 1930. The totals are as follows: — Sheep: 30/4/32, 25,G91,755; 30/4/31, 29,792,510; 30/4/30, 30,841,287. The Wellington West Coast district shows a decline of 476,909 head during the past year—equal to 43 per cent, of the total Dominion decrease. On the other hand, cattle show increased numbers, the comparative figures at January 31 being:— 31/1/31. 31/1/30. Bulls .. .. 08,SOS 05,373 Cows & hfrs. 1,601,633 1,443.410 Other cattle 2,410,584 2,203,440

4,080,525 3,770,223 The large decreases shown are no doubt partly accounted for by the heavy killings, particularly in sheep and Jambs brought- about by the dire necessity of many farmers forcing them to reduce their stock in an endeavour to reduce the gap between farming costs and revenue. Stock Market Unstable.

Turning now to the condition prevailing in the territory in which your company is operating. Following a backward spring, a dry summer and a very poor autumn growth, conditions throughout the winter were hard especially for cattle and in certain districts heavy losses were sustained, but on the other hand, sheep came through remarkably well. Favourable wea her conditions in the spring encouraged a splendid growth of feed and though the season might be late, stock is now doing particularly well and heavy killings for export are anticipated.

With the exception of dairy cattle, the stock market has been unstable and lacking in coniidencc, making it difficult to forecast values from sale to sale. Vendors have, however, for the most part, readily met the market and consequently the numbers of stock handled by your company show a large increase over the previous year. Owing to the shortage of feed and low export values, cattle prices have been abnormally low, in fact it is doubtful if prices ever before reached such a level. Sheep prices, however, although very low, were, considering the export values, remarkably steady and generally speaking found a ready market, though it is difficult to realise that only a few years ago they were selling at four times the money. Impetus to Agriculture. With the continuance of low values for meat and wool, many of our shareholders and clients have turned their

attention to agriculture, resulting in a large increase in the area sown down in wheat. In the Manawatu and liangitikei, excellent crops of prime milling wheat have been saved, the quality being classed by four millers as equal to the best Canterbury grades. In certified ryegrass, the well-known Sandon district produces from its old pastures, seed which compares favourably with the Hawke's Bay product, and if careful selection under the guidance of the officers of the Department of Agriculture is persisted in, an excellent trade should be established with other parts of the Dominion and outside countries.

Chaff, oats, potatoes anil oilier grains are likely to realise lower values during the coming season, as excellent crops arc anticipated in the South Island. Fertiliser Subsidy. The continuance by the Government of the subsidy on superphosphate has been of valuable assistance. It is gratifying to note that in face of the uncertainty of markets and the greatly reduced returns, our farmers for the most part using every means to improve the productivity of their farm lands. This is evidenced by the fact that whereas for the period, JanuaryJune, 1931, 152,000 tons of fertilisers were applied, for the slime period in 1932, the quantity was 222,000 tons, an increase for the six-monthly period of '70,000 tons. Dominion Trade and Finance. For the year ended (September 30 last, the total exports and imports of the Dominion as compared with the previous two years, are as follows: — 3932: Exports, £34,965,538; imports, £22,726,661; surplus, £12,241,877. 1931: Exports, £35,045,456; imports, £28,675,506; surplus, £6,366,650. 1930: Exports, £46,921,364; imports, £-15,453,894; surplus, £.1,467,470. This year shows the heaviest excess of exports for the past nine years, accounted for largely, however, by the heavy reduction iu our imports. For the coming year, exports will probably show an increased volume, but indications are that prices are likely to remain at a fairly low 7 level. However, our imports are sure to continue on a low scale, thus keeping the balance of trade on the right side. The mam primary products figuring in our export totals show that when compared with 1930, wool is down by approximately £3.000,000, meat by * £1,500,000 and dairy produce by £5,000,000, despite a very large increase in volume. The heavy reduction in imports is a sign of the times, but it is pleasing to note the greater volume of trade which the Dominion is now engaging in with the Mother Country which is, -aDor all, cur own best customer.

What of the Future? The uncertainty of the future makes one hesitate in venturing any forecast, for even the most sanguine and logical economists of the past have failed to visualise the liappcnings of the year under review. It is to bo hoped that the forthcoming International Conference early in 1933, will result in an agreement whereby the intolerable burden of reparations and war debts will be removed, thus enabling the whole world to emerge from this disastrous depression. Auy improvement, however, must necessarily be pf a gradual nature, as the prosperity of our farmers is almost wholly dependent on the spending power of the British public. J.t is obvious, therefore, that until there is a general revival in world trade, with a consequent decrease in the numbers of unemployed, no great measure of prosperity is likely to be forthcoming to this or any other country. Costs must be still further reduced, and although a certain measure of relief is afforded by legislation recently passed, it is the imperative duty, of Parliament and local bodies to further lower their expenditure and reduce our present heavy burden of taxation. Co-operation Essential.

Times of adversity generally serve one excellent purpose—that of uniting Sl

those in difficulty to better meet the common foe. To-day the farmers of the Dominion arc faced with problems which demand united effort and ■ combined organisation to enable them to conserve their resources and consolidate their energies.

Never in the history of this fair land has there been a time when co-opcrafion amongst our producers was so essential —co-operation based upon mutual understanding and mutual support. A “Farmers’ Co-operative” institution, such as we represent, should have the backing of every producer in the province, for wc stand, for the independence of trade in all that is vital to the man of the land. That which the individual cannot achieve, co-opcration makes possible. ■ ■

. 1 9 O 1. * O —< la aa .. 106 61 1980-81 .. 11G 62 1929-80 .... .. 158 86 1928-29 .. .. .. 17-1 96 1927-28 .... .. 170 98