FEDERATED FARMERS GRAIN & SEED CHAIRMAN IAN MORTEN

Harvesting had been progressing well until three days of easterly rainfall hit, with crops not headed beginning to show the effects of the wet weather. Most growers appear to have completed harvesting their grass seed and are now well into grain crops.

Yields to date are average at best with some very poor results from dry land crops and those affected by frost, hail and wind. Very small volumes of grain are also being traded so it is difficult to get a true picture of where market prices will settle. However, it is clear that prices being offered by some merchants seem rather low.

The comparison between local and imported grain prices has attracted considerable media interest. Statistics NZ figures for the months October to December 2008 reveal that 60,842 tonnes of wheat was imported into NZ at an average cost of $725 per tonne with the price ranging from $571 to $774 per tonne

While there is a danger in comparisons, it does seem that for the same period, 12.5% protein free NZ grown milling wheat was priced at $380 to $450 per tonne delivered to Christchurch.

Growers are asking:

• Why the difference?
• Are the statistics wrong?
• Is it because the grain was purchased months ago when the prices were much higher?
• Was it to be mixed with our NZ grain to meet higher milling/baking standards?
• Was this wheat purchased at this higher price because the end users were uncertain of NZ supply?
• Or were NZ growers not offered a high enough price to encourage the growing of milling wheat?

I am assured that the statistics are correct. The imported grain may have been purchased when higher prices occurred earlier in 2008 but at the same time NZ growers were being offered contracts at considerably lower prices.

Premium flour comes from premium wheat. We have the choice of the very old Domino variety and the newly released Conquest in premium grade. The industry requires new varieties of milling wheat and R&D is desperately needed to find or breed these varieties.

I received $371 per tonne in August 2008 and $380 for January 2009 deliveries of Conquest wheat to Christchurch. This wheat was contracted in May 2008 and had a 13.8% protein level. This year, that same quality wheat is contracted at $545 per tonne.

ABB Grains NZ Ltd has purchased the NRM feed mills at Levin and Rolleston and the textured feed plant at the Takanini feed mill from Tegel Foods. ABB has put significant investment into storage and milling in NZ in a bid to strengthen its presence in the NZ grain scene.

EAST COAST, ROB FOLEY
• Rain around 10 February means farmers have only been able to harvest two days since then. In central Hawkes Bay, we have had about 65mm of rain in February with the rest of the region having less.
• There has not been a lot of grain traded in the past four weeks. Still malting barley is being rejected due to high protein levels, the offered price for rejected has now dropped to $315 p/t.
• There have been several cancellations of straw orders from dairy farmers. The maize silage price un-contracted has dropped to 15-20 cents per kg/dm and we are hearing prices of around $300 p/t for feed maize.
• Yields are still well down, yielding between 3-4 t/ha for the later sown crops with the odd one at about 5 tonne.

MID CANTERBURY, DAVID CLARK
• The 90mm of rain which has fallen arrived two months too late, a cruel blow to arable farmers. Those who escaped drought, hail and frost have now been affected by a wet harvest.
• Dryland harvest is finished with very poor yields. The irrigated harvest looked promising, but rain has ruined the quality of the 50% unharvested.
• Clover has been abandoned in many cases. Growers need to be very aware that merchants and end users are set on making significant proceeds from this.
• I have been in touch with one firm who stated that they would buy all the feed barley they needed at $250 tonne. We must not sell at these levels unless you plan a clearing sale after you pay for your chemical and fertiliser.
• I remind arable farmers that in October-December 2008, end users paid $725 for imported wheat while only offering local growers $350.
• The low yields from the drought will more than offset any additional feed grain due to the wet harvest.

SOUTH CANTERBURY, MICHAEL TAYLER
• Our region has had varying amounts of welcome rain lately. In South Canterbury, we had 47mm of rain total over the last eight days so the countryside is beginning to respond.
• The harvest in South Canterbury is around a third through with all the ryegrass finished and mainly wheat left.
• Locally, most people have finished their ryegrass so although we are in the middle of harvest, the rain has done more good than harm.
• Yields seem to be varied depending on how much water was applied or available.
• Generally, ryegrass and wheat yields were average at best, with some above, on irrigated country and below average to poor on dryland crops.
• There still has been no grain traded of any volume so price-wise it is hard to guess. I gather some end users have higher than usual carry-over this year so may see a delay of a month or two before they enter the market.
• For grain growers with storage my advice would be to hold. For those without, find some storage quick if possible or their grain may be highly discounted at sale.

SOUTHLAND, JOHN GARDYNE
• The weather for February has been cold.
• The crops have been slow to ripen
• Autumn sown barley is nearly finished with the yields ranging from poor to very good.
• Autumn wheat just starting
• Spring barley 2-3 weeks away on heavy soil & good crops
• Oats 3-4 weeks off.

The following anecdotal prices have been collected from our Chairmen around New Zealand.

PROVIDED BY MALCOLM BARTHLOMAUES, CALLUM COMMODITY NEWS, OVERNIGHT MARKET NEWS (Sources: Dow Jones, AgricultureOnline, Future Source, Bloomberg)

• Wheat fell 15.5 USc/bu overnight, moving sharply lower in line with global share and commodity markets.
• Crude oil also fell away, dragging down grains.
• Wheat came under more pressure compared to corn because of lower export inspections of 8.664 mill bu.
• Export inspections are running at 77.5% of the projected total compared to a 5 year average of 74%.
• Falling Russian wheat prices are also said to have added weakness to US prices, as did a stronger US dollar.
• Corn fell 8.75 USc/bu again driven by the sell off in shares and crude oil.
• There is a fear that a further pull back in the global economy could continue to destroy demand for corn, particularly for feedlot use and ethanol production.
• Cumulative export inspections for corn are running at 44.3% of the USDA forecast, compared to 48.4% on average.
• Soybeans fell 28 USc/bu. Rain in South America added to the weakness coming from the stock markets and crude oil.
• Newly harvested soybeans are now on the move in Brazil.
• Cumulative export inspections stand at 71.5% of the USDA forecast compared to 69.5% on average.

CURRENT GLOBAL CROP TALK

It is dry in parts of the US winter wheat belt with these conditions getting close to providing underlying support for the markets if they persist.

Meanwhile in India, a heatwave at the end of February and beginning of March could stress wheat and canola crops.

In the US, there is speculation that President Obama could increase the ethanol mandated level from 10% to 15%. That not only increases the amount of corn needed for ethanol, but also increases the output of DBG, which of course goes straight into the feedlot industry. Therefore, its impact on overall corn demand is not as great as some opponents to ethanol would tell us.

FEDERATED FARMERS GRAIN AND SEED  AGM/CONFERENCE - The 2009 Grain & Seed conference is in Ashburton, 3-4 June at the Hotel Ashburton. More information is to come.

FEDERATED FARMERS NATIONAL BOARD MEETING - The next National Board meeting is to be held on April 14-15. If you would like any issues to be addressed or have points of concern that you would like tabled or discussed at the forthcoming meeting please feel free to contact John Hartnell (021 578 754) or Ian Morten.

LEADERSHIP TRAINING
Help yourself become a Federated Farmers of New Zealand leader by attending one of our two leadership courses.  For more information please click here or call 0800 327 646 to speak with your local provincial president. Spaces are limited so be in quick.

EMPLOYMENT TRAINING
Learn more about retaining your best staff and be updated on the legislative changes that have occurred in the last six months. To find out when the next seminar will close please click here or call 0800 327 646. 

RURAL JOBS
Looking for a job or trying to find someone? Then make the first stop a visit to Federated Farmers website.  To advertise for employees or see what is available please click here.  

SPECIAL DISCOUNTS
Ravensdown- Ravensdown have slashed their prices on superphosphate, DAP and urea, From 30 January Ravensdown is reducing superphosphate by $111 to $429 per tonne (direct debit price); DAP by $472 to $995 per tonne (direct debit price) and urea by $165 to $695 per tonne (direct debit price). Please click here for our price list.  

More special discounts - To find out more about special discounts for members call 0800 327 646 or please click here.

SHOP ONLINE

Farmers online - You can now purchase all your Federated Farmers of New Zealand contracts, agreements, books, branded clothing and even pay your 2009 membership subscription on Federated Farmers new online shop. Read more »

Contracts and agreements - Members can purchase Federated Farmers contracts and agreements at a discounted rate. Read more » or call 0800 327 646.

Special discounts

To find out more about special discounts for members call 0800 327 646 or Read more »

RECRUITMENT

Join up - Send a copy of the Arable Bulletin to a non-member. If they join up as a full member, you will both receive $50. To join call 0800 327 646.

RURAL JOBS

Job stop - Looking for a job or trying to find someone then make the first stop a visit to Federated Farmers website.  You can both advertise for employees or see what is available. Read more »

TRAINING

Essential estate planning tips - Learn how to grow and protect the farm asset in the present, and plan for the ultimate transfer of the farm business and associated assets to the next generation in the future. Federated Farmers of New Zealand and Guardian Trust are holding informative, question and answer style estate planning seminars to provide you with a valuable introduction to the topic from their experienced and knowledgeable estate planning experts. The cost to members is $40. To find out when there is one in your area or to register for a seminar in February or March call 0800 327 646 for time and locations nearest. Read more »

If you have any questions or comments about matters raised in this newsletter, please don't hesitate to contact one of the team. After all, that's what they are there for!

For more information, contact Carly Sluys at csluys@fedfarm.org.nz or on 0800 FARMING

DISCLAIMER

The information contained in this bulletin is of a general nature only. You should seek professional advice before taking any action in relation to matters dealt with in this publication.