Thursday, 30 October 2014 11:04

Business as usual for arable in the meantime

Written by Rural News Group

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THE CHIEF executive of the Foundation for Arable Research, FAR, says to date the drop in the price of milksolids isn’t affecting arable farmers.

Nick Pyke says this is because most of them are contracted at last year’s prices or have forward sold crops at good prices. Given the shortage of grain in New Zealand the prices are holding up well, he says.

But Pyke warns that after the 2014-15 season things may change and prices won’t remain the same as now. Towards the end of this season’s harvest in March and April 2015, when there is more grain on the market, the price are likely to drop a bit at that point.

“In maize production, the forecast in July was that the area of maize was going to be up slightly, but that could have changed quite markedly if farmers had changed their minds on their plantings. From what I hear it could be pretty much business as usual in both islands.”

Pyke says farmers have come out of droughts and will be looking to build up their supplementary feed stocks. Many dairy farmers who run intensive systems rely on extra feed and he doesn’t see them cutting this out overnight.

Meanwhile observers say it’s not all doom and gloom in the grain market as a result of the drop in dairy payout. But in their October grain market update, Farmlands reports there is little interest from the dairy sector in buying new season wheat and barley. They say the grain market is very fluid and seems set to remain that way in the short term.

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