Farmlands sows some small seeds of confidence in cropping

Press, 15 May 1987, Page 12

Farmlands sows some small seeds of confidence in cropping

Farmlands Grain is to develop a small seeds exporting speciality and has appointed an export manager, Mr Lyn Rosevear, to concentrate on this area and the marketing of developing crops.

It will be new business for Farmlands, Involving new contacts overseas, said the managing director, Mr Murray Gilbert With the growing importance of small seed production to Canterbury and Otago and the increasing demand from places like the United States, where'the Government is encouraging pasture renewal, it was time for Farmlands to extend its services to the cooperative’s clients, said the chairman, Mr Graham Robertson. The former chairman of the Seeds Promotion Council and herbage seeds subsection of Federated Farmers said the international market moved in cycles and that in the short term many arable farmers in New Zealand were going to get involved.

“It is important that we should ensure that our members are getting the right returns from exporting seeds. “We will be bringing back the market intelligence to the growers, which will enable informed decisions,” he said.

Mr Gilbert commented that Farmlands wanted to get as close as possible to the overseas end users of New Zealand seeds.

The co-operative would be offering a number of marketing options for growers, probably including pooling, although that had not been confirmed. Costs would be kept separate from barley and wheat operations.

Small seeds could be sold in small lots, perhaps on behalf of individual members or groups of members, whereas the shape of the grain exporting industry dictated pooling for the co-operative.

When tackled on the difficulties that pooling raised for farmers’ cashflows, budgets and bank managers, Mr Robertson and Mr Gilbert replied that they , were very conscious of these problems for growers. Guaranteed minimum prices or fixed prices would be offered if

Farmlands was able but with limited assets it would have to sign forward contracts with buyers so as to offer fixed prices back to growers, they said. “We attempted this year for the first time to put together a fixed price contract for malting barley,” said Mr/Gilbert, “but it was impossible because of the high value of the New Zealand dollar,” "In any other civilised country,” commented Mr Robertson, “we would have a bottom line scheme underwritten by the Government but our present Government is firmly against such schemes.” “We have to stick to pooling and feed as much intelligent marketplace comment back as we can. “Our marketing people are always happy to talk to farmers’ advisers,” said Mr Robertson. Farmlands has predicted market prices with a good track record and Mr Gilbert’s estimates have usually shown up well against final pool returns.

He also publishes interim prices for wheat, barley and oil seed rape at harvest time which become first payments on delivery. So what are Farmlands’ predictions for the rest of this season’s marketing and the next?

With marketing largely completed for malting barley from the 1987 harvest, the co-operative is on track for about $l6O a tonne; March' basis, Mr Gilbert said. Its general purpose barley would probably return around $l2O a tonne, although a lot more marketing remained to be done.

Triumph is still performing well in the marketplace and on farm, and Farmlands is again encouraging growers to go for malting barley in 1988. It is expanding its South American markets and excited about the first big shipment to China, leaving Timaru at present. “With increasing consumption of malting barley in these large markets we are quite optimistic for 1988,” Mr Gilbert said. He is also predicting again that the downturn in world coarse grain prices has bottomed out but that effects of the price war between North

America and Europe will keep general purpose barley prices low. Mr Gilbert repeated that satisfactory progress was being made in selling the Farmlands milling wheat pool for 1987. Sales were being made “in line with the stated objectives” of $250 a tonne for 100 index wheat but there was still some way to go and deliveries to millers will need to proceed during the rest of the year. Although Mr Gilbert did not comment, it seems public knowledge that the Goodman group bakers were allowed to contract on a short term basis with independent millers for flour needs as a prelude to the Commerce Commission hearing into the proposed merger between Goodman Fielder and Wattle Industries, Ltd. This would mean that N.Z. Cereal Foods, Ltd, the milling arm of Goodman, could save its contracted wheat supplies until later in the year. Whatever way they are committed, growers should not hold their breath waiting for the call to deliver. So it is unrealistic to expect Mr Gilbert to predict a 1988 wheat harvest price but he did say that growers would need some firm indications from millers of a willingness to pay at least $250 a tonne before planting autumn wheat. “If wheatgrowing is to survive in New Zealand, growers have got to get $250 for the lower quality range,” he said. Prospects for oil seed rape are good and prices on overseas markets encouraging, said Farmlands,* with the indications being that the 1987 pool would return $325 a tonne, March basis. One shipment had been made of 4500 tonnes to Japan and the co-opera-tive now had to market the balance of the pool. Quality had varied this season, with quite a large number of first time growers who had a few lessons to learn.

“Experience counted in a difficult season, but the Marnoo variety is fine,” said Mr Gilbert.

Although times „are tough for arable farmers, Farmlands wants to encourage them to stick with it and fine tune, not abandon the industry.