Competition concerns have spooked New Zealand bread wheat growers as they challenge worrying buying practices.
Uncertainty over restrictive new buying practices and competition from the feed wheat industry has seen growers cut back on sowing milling wheat.
Federated Farmers arable industry chair Colin Hurst says farmers are not being incentivised to grow milling wheat and are voting with their feet by switching to other crops.
A recent survey reveals milling wheat crop sowing is down almost 30% on last season.
“It’s worrying that buying practices we believe may be anti-competitive, coming at a time when growers are able to receive better prices for animal feed wheat, may result in NZ becoming more reliant on imported milling wheat for a staple food,” Hurst said.
Feds is keen to discuss the situation with the Commerce Commission and has also approached Commerce Minister David Clark.
In recent times, there have been three buyers purchasing NZ-grown milling wheat for local flour mills.
This year, just one agent is handling the purchase of milling wheat for two of the buying mills that Feds understands represent up to 60% of the homegrown product.
Of further concern is that the agent owns one of the mills.
“We think government should be interested in this situation, given the NZ crops and seeds sector has raised gross revenue from $655 million in 2017 to $940m last year, and while New Zealanders indicate a will to support locally grown produce,” he said.
“For a staple like bread, surely we want to encourage competition.
“We had been steadily growing local production up to 110,000 tonnes, making us more resilient to disruption, but clearly growers are currently not being incentivised to grow milling wheat.
