Speaking at the herbage seeds sector’s annual meeting in Ashburton Gerard said the 2020 harvest season has been one of the easiest ever but he cautioned of uncertainty ahead.
While covid-19 chaos did not significantly affect the sector, the ongoing global market uncertainty is challenging.
“It has been absolute chaos.
“No one knew what was going on but the industry has managed well through that with good technologies.
“A lot of companies have shipped a lot of seed offshore in the past three months and the world is still demanding our seed.”
For proprietary seed it is pretty much business as usual but there is still a lot of volatility, particularly associated with climatic conditions.
“We have the drought here in Hawke’s Bay and global climatic conditions, especially in Australia, are affecting our New Zealand seed market.
“It’s been a struggle but business is stable.”
International multiplications are in high demand with crops going in for the coming harvest one of the biggest on record.
“That will have its challenges getting product through the supply chain and out to market,” Gerard said.
New players are also boosting demand.
“China is one of the big new players because it is not happy with the United States.”
Commodity demand is also high but volatile with a lot of seed sitting in stores and on farms.
“We expect this will provide both risk and opportunity for us in NZ in terms of infrastructure.”
Gerard said a positive from covid-19 has been the increase in demand for sports turf seed and lawn seed.
“We have shifted thousands of tonnes of seed in this sector, especially with the increase in home lawn sowing but certainly not the same money.”
Gerard said more volatility can be expected in the next two years because of macro-economic uncertainty and emerging new production regions, citing crop diversification such as hemp.
Customer-driven demand will also be a challenge around phytosanitary and environmental requirements.
Overseas growth opportunity has increased 12% year on year over the past two years – but what now?
Most growth has been in speciality vegetable crops but because of specific isolation requirements for many of these crops it is becoming more challenging finding suitable growing locations.
“We are pushing crops way out to Southland, Wairarapa, anywhere we can get reliable infrastructure and water.
“In the supply chain we are dealing with a high-value, specialised product which requires a lot of on-farm infrastructure, particularly in drying and storage.”
Tasmania is looming as the major competitor.
“They are gearing up big time, ramping up infrastructure.
“The major challenge for them involves drying and storage – you have got that in NZ. They are working on it but they have got water too.”
NZ is renowned as a great place to do business but the industry must keep the pedal down on the advantages it does have while grabbing all opportunities as they arise, especially under the cloud of global uncertainty, Gerard said.
