Friday, March 29, 2024

Drought sounds wheat warning

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Bread and baking prices are about to rise with grain growers keen to reap any opportunity that presents. The opportunities for them stem not just from the devastating two years of drought in Australia , Federated Farmers arable chairwoman Karen Williams says.
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A large portion of the flour used by New Zealand bakeries is from Australia where drought has ravaged much of the wheat-growing regions in the eastern states, heavily cutting yields and quality and pushing prices up.

This season’s Australian wheat harvest forecast of 17 million tonnes is down from last year’s 21m tonnes and the 10-year average of 24.5m tonnes. 

Suppliers have signalled prices for bread are on the rise, possibly doubling, because of the lesser volume of wheat and increased demand for grain and wheat products around the world.

“Yes, there’s opportunity for NZ to produce more wheat and as an industry we are working on that,” Williams said.

“And yes, the drought in Australia that’s creating a shortage of wheat for baking is a reason for us to produce more wheat for milling.

“But it highlights more than that. 

“It highlights the threat to NZ’s own food security, not just because of what’s happening in Australia but also globally with climate change, frequent droughts, extreme weather events and natural disasters.”

The NZ mills have a high reliance on Australia and if it continues to have challenges there is real concern for NZ.

“We are too reliant on what’s going on (in Australia) and if we are not set up for ourselves, come a major disaster and there’ll be massive implications for our NZ food security.” 

As an industry there’s thought going on and plans in the making.

The Arable Food Industry Council, made up of industry stakeholders including the federation, the grain and seed trade industry, millers and bakers, is putting thought around such challenges, Williams said.

It has set a goal for achieving milling wheat self-sufficiency by 2025.

“There’s a lot of thought around the challenges of NZ’s own food security and while we have the end target of self-sufficiency we are also picking up targets along the way and transport has been agreed as a priority starting point.”

Countdown’s commitment last year to use only local product for its in-store baked bread and rolls from more than 10,000 tonnes of milled and Canterbury grown wheat has boosted growers’ commitment to self-sufficiency.

“We can grow that and demand from bakeries, particularly niche bakeries, is they like the provenance story and we’re working with the millers and baking industry to grow and supply the varieties they want.

“It’s not just bread and buns, it’s biscuits and other food products such as wheat in pasta and even pet foods.

“There’s a number of opportunities for us to supply into those markets but a key challenge for us is transport – getting the product to market.”

The bigger demand is from Auckland, hundreds of miles away from Canterbury or even Wairarapa grain.

“The transport cost makes the margin thinner For growers it needs to pay and AFIC is working on that as a key priority.”

With more and more land being tagged for forestry there is increasing competition for land to grow grain.

“We need to make sure our food bowls are protected and the farmer growing the food is operating on a level playing field against overseas investment that is going into the likes of the Billion Trees programme and competing for our food production land.

“We need land security to ensure food security,” Williams said.

Federation grains sector vice-chairman Brian Leadley said the market signals coming from the mills are encouraging, boosting AFIC’s drive for self-sufficiency in milling wheat. 

“There are contracts out there with pretty good pricing. 

“For lower end quality there are contracts for about $420 a tonne then as you go up in the higher premium grades prices go up a bit.

“Farmers have reacted to this and early indications are there will be a greater area of milling wheat varieties harvested in 2020.”

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