White clover seed hits a bad patch

Press, 2 September 1983, Page 19

White clover seed hits a bad patch

White clover, once the silver lining in the often dark cloud of cash cropping, has now tarnished badly and many Canterbury clover crops are being ploughed under for spring barley. Long-term price prospects for white clover seed for export are gloomy and New Zealand faces the prospect of large carryover stocks.

Cash croppers who only 18 months ago enjoyed more than ?3 per kilogram for their seed now face the prospect of prices approaching half that level. A meeting this week between Federated Farmers leaders and representatives of agricultural merchants resolved to point out to clover farmers that prospects were not good. Farmers have been urged to reconsider any decisions they might have made to harvest expanded areas of

white clover and consider instead planting spring barley while time still allows. “Unless New Zealand reduces its acreage of white clover for seed production, the price overseas will continue to be low for some time,” said Mr Graeme Robertson, chairman of the Herbage Seed Subsection of Federated Farmers.

What has eaten away this once sturdy plank under irrigation development inCanterbury and North Otago?

White clover growers have been to a certain extent victims of their own success. Yields have increased perhaps 25 per cent nationally during the last few years but these increases have been masked by drought-affected seasons which have reduced the national output below what it might have been. New Zealand’s major

competitor on the world market for white clover seed, Denmark, has also had some poor seasons but recent reports say that the harvest just completed was a real boomer.

Total world inter-country trade in clover seed is around 5 to 6000 tonnes per year and New Zealand supplies about 60 to 70 per cent of this trade.

Most of our exports go into Europe where Huia white clover has for many years enjoyed a reasonably stable market. But this market has not expanded, Mr Ross Smith, export manager for Hodder and Tolley, Ltd, in Christchurch, pointed out this week. Mr Robertson believes that promotional activities for white clover in Europe by the newly-formed Seed Promotion Council must work towards maintaining the market by releasing

new varieties to combat the slow erosion of Huia. Thus any over-all increases in sales are unlikely in the short-term. North America was thought to offer more hope of increased sales, particularly with the P.I.K. programme retiring wheatgrowing land to reduce grain production in favour of more pasture. But the United States has traditionally used red clover and sales to that region of white clover are only, expanding slowly.

Mr Robertson said that increased yields in New Zealand were a result of increasing irrigation, more growing expertise, better chemical control and much improved harvesting to cut harvest wastage. Large areas of white clover for seed production were now grown throughout Canterbury as it had a

reputation as a high-margin cash crop to support irrigation development. Indeed the attractiveness of white clover might not have been entirely dissipated by the recent price fall from more than $3 to about $1.95 per kilogram for first generation seed today. The latest edition of the Lincoln College Farm Budget Manual lists the estimated costs of establishing and harvesting a clover seed crop ex wheat. The accepted programme is to oversow into wheat in September and after the wheat is harvested the clover is grazed throughout the winter and spring. It is then dessicated in its second January and harvested. The manual estimates total direct costs for clover at $365 per hectare; including seed, fertiliser, heavy rolling, weed control, dessicating, mowing, heading and

dressing. Assuming a yield of 500 g per hectare field dressed and a 30 per cent loss on machine dressing, the manual calculates a gross return of 3875 at $2.50 per kg for 350 kg per hectare. The manual thus deduces a gross margin of $5lO per hectare, which compares favourably with the return from wheat crops in the same manual of $550 per' hectare. Thus a reduction in clover price to say $1.50, which would not be unreasonable for the 1984 harvest, would still leave the grower on the credit side for gross margin by $l6O per hectare. But this is unlikely to support the average indirect cost structure of the re-cently-developed irrigation farmer. Mr Robertson has pointed out that clover crops have other benefits beside the return on seed.

Clover is a fertility building crop after cereal crop depletions and has substantial livestock feeding value. He is worried that many Canterbury fanners will push on with expanded acreages of white clover either believing that export prices have bottomed or banking on the old “find out what everyone is doing and do the opposite” theory of agricultural management Promotional activities through the council will be long-term, he said, and in the short term white clover prices must stay down under the influence of oversupply. One consolation for the clover fanner is that white clover seed will store for some time. Dressed or undressed it occupies a small space for its potential value and will sit for perhaps three or four years without undue deterioration.