Arable yield up but storage allowance has become a sore point

The yield was up 7 percent on average across the six milling/malting and feed cereal crops last season but there were very trying conditions for some North Island growers.

The May AIMI (Arable Industry Marketing Initiative) report describes excellent harvest conditions in most South Island regions, though rain in March in parts of Canterbury and northern Southland doused crops and made harvest/paddock access difficult.

It was much more difficult in the North Island, Federated Farmers Arable Vice-President Grains, Andrew Darling said. After continual rain some spring crops had a harvest window but then February’s cyclone blew in, flooding paddocks, delaying harvest and in some cases large portions of crops were lost.

Some 103,200 tonnes of milling wheat were harvested, up 49 percent compared to last year when contracting issues saw growers pursue other options.

"I think we’re seeing some certainty and confidence return," Andrew said. "There’s varying opinions on the contracts put out in the last week or so but I think they’re fair. The biscuit wheat contracts got snapped up pretty quick."

The 62,700 tonnes of malting barley brought in is a 69 percent rise on the previous season. Malting barley has "been through a bit of a roller-coaster ride" but is now strengthening up.

However, feed cereal markets have gone cold, Andrew said. He puts that down to a combination of an excellent growing season for grass and the slide in whole milk prices causing many dairy farmers to look very closely at where they can pull back costs.

Some 303,800 tonnes of feed wheat were harvested - down 3 percent compared to last year - with 72 percent sold at the time of the AIMI survey. Of the 286,500 tonnes of feed barley, 40 percent was unsold - a rise of 47 percent compared to this time last year.

The amount of sold grain still on farm has become more than an irritation.

"Feed mills have been empty and grain should be flowing in," Andrew said.

"Growers are aware that the current standard 8 cents per day per tonne to store grain is a bit light, with the increase in insurance and interest costs, maintenance and quality control. Federated Farmers and the United Wheat Growers are researching the true cost of storage for the grower and intend talking to mills and merchants about it."

Autumn/winter sowings of feed wheat are predicted to be similar (down 300 hectares) to predicted sowings a year ago, while feed barley autumn/winter sowings are predicted to be down 900 hectares. Milling wheat autumn/winter sowings are predicted to be up by 1,400ha, malting barley up by 600ha, milling oats up 400ha, and feed oats down 450ha.

However, these predictions are based mostly on intentions as over all six crops only 4 percent (feed wheat and feed barley) had been sown by the 1 st of April due to the wet weather or wet ground in many regions. No milling wheat, malting barley, milling or feed oats had been sown.

There had been talk that the area in cereal could increase due to a decrease in ryegrass hectares but the AIMI returns suggest that’s not the case, and merchants are not seeing an increase in cereal seed sales.

Farmers may be opting to have fewer lambs and selling them earlier to avoid bottlenecks and with the loss of live exports farmers either won’t have cattle or will sell calves as bobbies, impacting on the area of feed/grass grown.

"Arable growers could be choosing different options, with increasing interest in alternative crops," AIMI report commentary said. "But these are only small hectarages compared to cereal and grass."

ENDS

For more information contact:
Andrew Darling, Federated Farmers Arable Vice-Chairperson Grains, 027 706 9881
Simon Edwards | Senior Communications Advisor, Federated Farmers
Email: [email protected], Mobile: +64 (0)27 484 8892