“This long-term supply contract to Countdown for local grain is a breakthrough for us as an industry.
“It’s the golden opportunity we have been working on to win back market share that has been filled by imported grains and flour for too long now.
“But we can’t make it happen overnight,” Leadley said.
“Now this contract is confirmed farmers can plan ahead to grow for the mill but this year timing has been an issue.”
By the time the Champion Flour Milling-Countdown supermarkets deal was sealed farmers already had their rotations planned and much of this season’s crop was in the ground.
“Cropping decisions happen 12 months out and already in our operation, rotation-wise, we are considering now what crops will go where next year and even drafting the longer-term plan.
“Farmers do need to look at committing now that we have consumers wanting to use our product.”
Until this year the in-house bakeries of 180 Countdown supermarkets used premixed ingredients largely imported from Australia.
Christchurch-based Champion Flour Milling recently sealed a deal that will see the supermarkets’ bakeries switch to premixes using locally-grown products for all loaves, roll, buns and scones.
Champion’s business innovation manager Garth Gillam said the contract is the culmination of years of effort.
While support from local industry and growers has been excellent, farmer commitment is needed.
The challenge now is to source sufficient grain. Quality and continuous supply are key to mitigate risk of losing the contract.
Leadley said there’s no doubting local industry and grower’s ability to supply the quality and innovation required.
“We certainly have the agronomists, soils, innovative (grain) varieties and growers with the capability for good production.”
What will be a factor for growers is their ability timewise to switch to more milling grain production.
“This year a number of growers have made the commitment around feed (grain) and that’s been a decision not only around timing but the ease of management, fully utilising on-farm infrastructure and financial.”
With greater risk around quality and yield and specialist storage requirements, management is more complicated around milling, Leadley said.
Potential yield and grade quality penalties are a risk, especially when feed grain prices are higher.
“The bottom line is net return – rotation, work load, storage and input cost all need to weigh up against net return.”
Growing and weather conditions are also a critical part of the equation with the optimum yield window of opportunity much wider for feed varieties.
Leadley is confident growers will factor milling wheat into their rotations and longer-term crop planning.
“In the future we hope milling contracts will be priced attractively for growers to pick up.
With prices around $400 a tonne for both wheat and barley and the kind spring for planting, arable farmers are optimistic for a better harvest this season.
Depending on variety and quality, milling wheat prices are looking to be $420-$450/t for next year with the top end feed contracts on farm delivered at $400-$420.
“We have been saying for some time that mid-$300s pricing is not sustainable and we appear to have pushed through that now.
