Over the past four harvests wheat production has bumped up significantly to 110,000 tonnes, putting the project on track to meet industry goals.
Farmer and industry support for the project has been positive.
But significant adjustments to controversial trading dynamics for the coming season are derailing the plan.
Farmers lack confidence and industry is nervous following the details of the change that has come too late for farmers.
In March, Christchurch mill AB Mauri, formerly the Weston Mill, notified its new procurement policy that significantly changes the trading dynamics for the South Island milling wheat industry.
AB Mauri is a leading supplier of bakery ingredient solutions across Australia and NZ.
Detail has been slow to emerge creating uncertainty with many farmers lacking the confidence to plant milling wheat this season.
In desperation to get answers, Federated Farmers convened a meeting in Ashburton to hear from Wilmar – a large-scale Australian-based integrated commodity merchandising and supply management company – the sole trader now tasked with procuring the majority volume of AB Mauri’s South Island milling wheat requirements.
Wilmar will also procure for Goodman Fielder milling requirements at the Farmers Mill in Timaru.
It was standing room only, with the meeting attracting 140 farmers and industry stakeholders looking for a please explain.
Industry feared the new procurement policy would potentially lead to a fall in local milling wheat production.
Those fears are realised with the latest arable industry marketing initiative (AIMI) grower survey revealing autumn and winter drillings of milling wheat back 1800ha on the last season.
“We were really concerned that milling wheat was not going in the ground because of misunderstandings and uncertainty, ‘’ arable industry chair Colin Hurst said.
“Sadly, we are not going away from this meeting with much more confidence.
There will be no contracts offered publicly, Wilmar will deal directly with growers.
“We take a pragmatic approach, we know the tonnage we need, we will work with the mills, farmers and agents, if they are involved, to get what we want and then close off,” Wilmar South Island merchant Brad Davies said.
“Our aim is to collect tonnes direct with growers and reduce the amount of carryover.
“Our volumes for NZ mills are no less, if not more than has been in the past.”
What if there’s not sufficient local grain?
“We will support 100% NZ grain where we possibly can, but I can’t stop putting bread on the shelves – then we go to Plan B, C, D,” he said.
Davies acknowledged the timing is not great for the new season’s planting.
“People have to make a decision and yes, this may impact the milling industry this season,” he said.
Davies would not be drawn on pricing, or volumes.
United Wheatgrowers chair Brian Leadley says it is too late now for milling wheat this season.
“We have missed the boat potentially on the area we could have had in,” Leadley said.
“I am reluctant to say it, but the lack of trust and confidence in the system does put the supply local grain project under real threat.
“This strategy around the procurement and marketing has caused confusion and seriously impacted on planting time and land-use opportunity with extra grass rather than wheat being planted.
“It’s been a big effort in recent years to collaborate and get where we have, we just needed everyone to keep working together.”
If seed companies are discontinued in the contracting of milling wheat between farmer and mill, the entire NZ milling wheat breeding effort is at great risk and the financial implications may cause these breeding programmes to be shut down entirely.
This would be a huge loss, as it would inevitably lead to much less milling wheat being grown in NZ and much more milling wheat being imported into NZ.
“It will be a big chunk of our armour gone, and sad for farmers if we can’t continue breeding new varieties,” he said.
“In the changing environment we need breeding even more to keep the arable sector viable,” PGG Wrighston grain R&D manager Nick Brooks said.
More: Farmers wanting to know more can contact Wilmar merchant Brad Davies on 027 7765 550.
