Arable industry positivity on growth path
Cuts in unsold stocks and a continued resurgence in hectares sown is more evidence of confidence throughout the arable industry, Brian Leadley of Federated Farmers says.
"The arable industry is considerably more positive than in years gone by, with stronger prices, good demand for our products and some favourable planting and climatic conditions all pointing towards a satisfying harvest."
Brian, the Federated Farmers Arable Industry Vice-Chairperson, Grains, said the just-released Arable Industry Marketing Initiative (AIMI) Survey report shows that, compared to October 2017, unsold stocks of the six cereal crops are down 23 per cent. Unsold stocks of cereal grain reduced by 65 per cent between the July and October surveys.
In terms of spring sowings, 84 per cent of the crop area intended for planting had been planted by October 10.
"The variable spring weather did delay planting of some spring crops, mainly in Southland, South Canterbury and parts of the North Island. This replicates the situation in autumn with some of those crops drowned and needing to be replanted," Brian said.
However, the total area sown in cereals is estimated to be up 2 per cent (or 1,800ha) on last season. An increase in milling wheat planted is particularly encouraging.
"This latest AIMI survey shows the resurgence in sowings described in the October 2017 report has been maintained. As a comparison, over the last two years the total area sown plus intended to be sown in wheat, barley or oats, as at 10 October 2018, was estimated to be 19% up on the area harvested in 2017 - mainly due to increases in sowings of feed barley and feed wheat."
As well as those factors already mentioned, Brian said other elements were also contributing to sector positivity. There was the well-publicised switch by Countdown’s 180 NZ supermarkets to pre-mixes for its in-house loaves, rolls, buns and scones made only from locally-grown product, when before some imported product had been in the mix.
"It highlights the quality of the grain we’re producing, getting the message out there that our product is grown under a quality assurance programme, with traceability standards that are audited. And we’re price competitive."
"We’re pushing forward on a number of fronts, and that also includes opportunities within the dairy industry for feed grain and cereal silage," he said.
"Prices for imported palm kernel expeller are high, and there are environmental considerations there. There’s also a bit of work going on around nitrates - we’re just doing the research to get solid evidence - that nitrate outputs from grain or grain-based supplementary feeds can be lower than from pure grass-fed stock."
Brian said that particularly for drought-prone farms, or when there is a supplementary feed shortage, there’s a good case for dairy farmers to look at New Zealand grain and cereal silage.
"There is interest but it’s only slowly building," he said. "We’re up against the fact that livestock farmers view grass grown in their paddocks as the cheapest feed, and easiest to manage. We accept that managing a grain component versus grass and/or palm kernel to get the returns is a new level of management.
"It’s a gradual thing but if we can even win a percentage of that industry over, it’s a big thing for our arable farmers."