Growers disappointed with new wheat contract price

Press, 10 February 1989, Page 16

Growers disappointed with new wheat contract price

The chairman of United Wheatgrowers, Mr Mervyn Gray, says wheatgrowers will be disappointed with the $l5 rise in the contract price for bread wheat. The increase was announced earlier this week by Allied Foods, Ltd, Christchurch . Flourmills, Ltd, and D. H. Brown and Son, Ltd. The amended contract price will apply to growers in the droughtaffected areas of Canterbury and North Otago. Mr Gray said some growers would be dissatisfied with the increase considering malting barley contracts had risen $3O a tonne and feed

barley contracts had been lifted $4O. The action of millers in raising the wheat contract price was a small measure of goodwill. United Wheatgrowers appreciated that the original contracts were binding on farmers at $250 a tonne for milling lines and $230 for biscuit wheat, said Mr Gray. The sole rights to change those contracts rested with the mills concerned. They decided against lifting the price to the current world price. . Mr Gray said any increase in the wheat price paid by mills could be covered by an increase in

the flour price because the flour contracts with bakers were to be renegotiated from April 1. Mr Gray said the cost of importing alternative wheats to New Zealand was $360 a tonne, allowing for $65 a tonne freight in transport from Australia to the mill added to the current A.S.W. price of $296. He suggested growers with “free” wheat should receive $360 a tonne, but he was not aware of millers offering prices more than $3OO a tonne. “Until they do offer more, growers are not likely to bring free wheat forward for sale.”

Mr Gray said he was disappointed that Goodman Fielder Wattie had this season already imported wheat to Christchurch from Australia at a higher price than offered New Zealand growers. Other plans to import wheat from Turkey were unacceptable to growers as it could pose a disease threat to the New Zealand environment. Mr Gray said fixed price contracts set 12 months before the wheat was delivered were becoming inappropriate in the fluctuating world wheat market.