Adding to the optimism of better times for local growers is the move this month of major supermarket chain Countdown to use only New Zealand-grown wheat in its bread and buns.
“That’s a real big plus for graingrowers and for Kiwi consumers to know that all Countdown’s bread and buns will be made from our own grain.”
In the past Countdown has used Australian grain.
With increased enthusiasm in the milling market Leadley expects there will be a bit more milling wheat go in the ground this season.
Contracts for next year at $430-$440 a tonne are sitting well up on last year’s $350/t.
“The mills are certainly back with more enthusiasm and for growers we are at sustainable levels and with options, especially given many of the milling varieties are late winter and spring planting.”
Ethical and contamination controversy around palm kernel has helped stabilise the domestic feed market.
“There’s steady demand from the dairy industry, prompted too by Mycoplasma bovis and the need for more good dairy feeds.
“Farmers are selling grain direct from the silo at some quite acceptable prices with feed barley at $400/t and wheat at $410.
“Certainly, prices have stabilised around there on the back, too, of a lift in meat values.”
Leadley said with lamb kill sheets coming in at $180 there are good options for arable farmers there, too.
As for the international scene, NZ’s main competition is Australia but if other markets came on that scene there could be a potential reduction of worldwide grain.
“But right now arable farmers are a lot more comfortable looking forward than they are looking back,” Leadley said.
On the international scene the recent release of the United States Agriculture Department’s monthly world supply and demand estimates (WASDE) report was supportive for most offshore grain markets but the recent impacts of the US-China trade rhetoric has created a volatile global market.
Trade talks between the US and China have not yet produced an outcome as both countries previously threatened tariffs are now in place.
That has weighed on Chicago Board of Trade (CBOT) soybean values and has occasionally had spillover pressure on the CBOT corn and wheat markets.
In contrast to the downward pressure, support for CBOT wheat futures has been found from multiple reductions to the production estimates for the European Union and Black Sea countries now harvesting their summer wheat crops.
Following a decline in the production of wheat in the EU and Black Sea updated forecasts of global production and end stocks have also had a bullish impact on the market.
The US-China trade tensions have stalled US soybean exports to China and it’s expected if there is a continuation of demand for animal feed from China, it will need to source that elsewhere.
