It is estimated unsold stocks of cereal grain reduced by 44% from July to October.
“That’s a good sign that people have been meeting the market and getting product sold,” Federated Farmers grains vice-chairman Brian Leadley, said.
Total production of wheat, barley and oats from the 2019 harvest at 799,900 tonnes is up 25,000t on the 2018 harvest.
While unsold stocks across the six grain crops are up by 52,700t compared to October last year people shouldn’t read too much into that, Leadley said.
“This time last year there was very little left about.
“When you look at it on a five to 10-year rolling average stocks still on hand from the 2109 harvest, 108,492t unsold and 227,747t sold and stored on farms, are not that massive.
“There’s a bit of concern about the feed barley market, which is a bit flat at the moment. We’d like to see that move a bit.”
Overall, the situation is stable.
“Prices aren’t bad but not a lot moved. It reflects the mood in agriculture.
“Feed grains are being bought when it’s actually needed rather than being bought and stockpiled or bought in preparation.”
Milling wheat options have been taken up with the mills responding well to calls from Federated Farmers and others in the industry to put out forward contracts early to send the right signals.
“It’s given some confidence to growers,” Leadley said.
In October the area already sown and that intended to be sown this season in wheat, barley or oats was estimated to be 5% or 5300ha down on the area harvested in 2018.
Over the two-year period feed barley area is down 18% while feed wheat area is largely unchanged, down just 2%, but milling wheat was up 27% and malting barley up 16%.
“When there’s lesser demand for feed grains the lift for milling wheat fits in well. It also has a bigger window for planting.
“For good yields of feed wheats they have to be planted early whereas with some of the milling varieties you can get them in a bit later.
“That can work with the farming rotation given a lot of arable farmers have a livestock grazing system within their operation and with good returns for red meat, in particular, it supports that later planting possible with milling varieties.”
On the whole, the trend is promising for the drive by the Arable Food Industry Council for New Zealand to be self-sufficient in milling wheat by 2025, Leadley said.
Generally, things are ticking over pretty well in the South Island.
In Canterbury it is starting to get dry with hot, windy conditions but recent rain has eased irrigation pressure, which is the same further south.
Planting has finished and everything is in the ground and growing.
New season crops are reported as looking good.
Grain sales have been reasonably slow, particularly into the dairy sector, and while that sector is still buying it remains fairly conservative buying.
There’s been a suggestion of the bank squeeze coming off the dairy sector but it is likely that applies to only a handful of properties as there’s been no feedback of that translating to sales.
Signals suggest there is still more work to do on highly leveraged farms.
Industry feedback says South Island wheat is not yet competitive with imported product from Australia.
With variation in product quality between the two sources it might make it challenging for end users to switch to NZ at this stage, the NZX grains and feed insight reports.
In the North Island maize planting is almost finished and while some crops have been slow because of cold weather, earlier plantings appear to be going reasonably well.
Cereal crops are also expected to be all but planted, despite the need for some replanting.
Though North Island markets remain a little slow excess stocks of barley are low but surplus maize remains a concern because it has to be used before silos are required for wheat or barley over the next couple of months.
