Arable farmers consider their options after tough summer season
May 1, 2018
Having come through a tough summer for growing crops and with current market signals muted, it appears arable farmers are pulling back on planned autumn plantings.
“The flat prices of the last few years are now rebounding a bit but growers remain hesitant to plant massive areas,” Federated Farmers Arable executive member Brian Leadley said.
“With the buoyant demand from the livestock sectors (dairy in particular) we anticipate that milling wheat plantings will reduce as farmers plant feed wheat/barley instead.”
“If farmers and other end users are wanting domestically grown and quality-assured New Zealand-grown grain they should contact their supplier. If the signals are strong enough and positive enough, there is still plenty of time for growers to change their intentions.”
Brian was commenting after the release of the Arable Industry Marketing Initiative (AIMI) April 2018 Survey. It showed average yields over the six surveyed crops were down 12 per cent after a shortened growing season and early harvest marked by ‘four seasons in one day’ type weather. Periods of high rainfall June-August when some crops were flooded out was followed by the heat of October-December and periods of heavy rain hitting hit during key crop establishment periods.
“With climate change, that’s part of the game I guess,” Brian said.
All the surveyed crops had been harvested by 1 April. This is particularly unusual for oats, which are generally not harvested in Southland until well into May.
“Southland had drought-type conditions into mid-January, which promoted quicker growth and earlier maturity. That probably had a detrimental effect around yield but it was able to be harvested earlier and may well have improved quality a bit,” Brian said. “It was the same with all those late harvest crops.”
The AIMI survey shows carry-over stocks of feed wheat and feed barley are lower than usual, with virtually all harvest 2017 stock sold to end-users. Available stocks of 2018 harvested grain will also find a home.
Despite the good conditions for preparing and planting crops, very little of autumn sown crops had been planted by 1 April 2018. The survey indicates that predicted autumn plantings will be back by about 3,400 hectares (about a third), with milling wheat and malting barley back (reflecting poor price signals from those sectors), and feed barley up.
“Grain prices over the last couple of years, from a growers’ perspective, have been unsustainable for long-term returns when investment in land, capital for machinery and so on is added into that gross income vs growing cost equation.
“So it’s pleasing to see a bit of a revival in those prices,” Brian said.
“By the look of the survey results, those past poor seasons have pushed some arable growers to look at other options. The recent prices may have given room for more optimism.
“The survey has given as a good mark on farmers’ planting intentions at this stage. The next AIMI survey in July will tell us whether those plans changed as a result of market indicators.”