Grain hit by flat prices
Arable farmers are likely to reduce grain crop plantings unless buyers signal their interest soon, as flat prices take their toll, warns arable farming leader Brian Leadley.
‘‘It reflects that prices over the last few seasons have been below sustainable levels. The signs are improving, but there is not a lot of trading at the moment, so growers are reluctant to commit.
‘‘End users of grain, regardless of whether they are dairy farmers or flourmillers, need to be talking to suppliers to register their interest. We need some clear signals so arable farmers can make decisions for autumn and winter planting,’’ said Leadley, Federated Farmers’ arable vice-chairman and grains spokesman.
Plantings of milling wheat, in particular, look to continue their downward trend according to the latest Arable Industry Marketing Initiative (AIMI) cereal crop survey. Growers said they only intended to plant half the area of milling wheat sown last year, although this may change as the planting season progresses. The milling wheat harvest of 82,000 tonnes was down 23 per cent compared with last year’s harvest of 107,500t.
In contrast, feed grain plantings were likely to be up, with prices for feed wheat and barley competitive with milling wheat, despite milling wheat producing lower yields and needing stricter quality parameters.
‘‘That has continued to drive farmers into the feed grain market, particularly if they have paddocks ready for early planting, which is when they will achieve a yield advantage.’’
Carry-over stocks of feed wheat and barley were lower than at the same time last year.
Prices of up to $400 a tonne are being offered for uncontracted milling wheat from this year’s harvest, depending on variety and quality. ‘‘So there are some mills looking for New Zealand grain.’’
Milling wheat contracts for next year’s harvest are yet to be released.
A few contracts were being offered for feed wheat for the next harvest at about $380 to $385/t.
‘‘Prices have certainly improved on 12 months ago, but growers remain hesitant to plant massive areas. That is what has been driving the reduction in intended plantings.’’
Growers are considering how best to use their ground, including spring options such as vegetable seed production and processed vegetables such as peas, potatoes and sweetcorn.
Livestock farming is another option because of improved meat Federated Farmers arable vicechairman Brian Leadley prices. ‘‘Particularly if growers have stock in their system, they may boost those numbers.’’
This year’s harvest was regarded as poor by many growers, with average yields down 12 per cent over the six crops surveyed compared with last season.
Wet conditions, followed by the extreme heat of November-December, made crop establishment difficult.
Even irrigated crops yields were down, as the heat meant they went through their growth stages too quickly. More hectares were harvested than last year (up 18 per cent), with a 3 per cent increase in total tonnage.
‘‘The weather affected a big growing area which is why the average is back,’’ said Leadley.