Grain squeeze hikes prices

Current prices for both feed barley and feed wheat are the highest May prices that markets have seen since 2008.

New Zealand's feed wheat and barley stocks are at their lowest level since 2011, according to a recent survey of cropping farmers, issued by the Arable Industry Marketing Initiative (AIMI).

What has impacted overall stock most significantly is the lack of carry-over from the 2013 harvest. Virtually no harvest feed grain remained unsold from April 2013.

The AIMI survey report says that "in a nutshell, there is little free grain in the market as at April 1, 2014 as compared to two previous seasons. The unsold quantity of feed wheat was about half of the unsold tonnages of a year ago, and the unsold tonnage of feed barley was about one third."

The report also notes that estimated harvest tonnages for both wheat and barley were down on the 2013 harvest due to a slight reduction in overall area harvested (1 per cent) and a significantly reduced yield for wheat down 0.5 tonne per hectare, after a very strong year in yield terms in 2013.

NZX's Profarmer has reported that the survey results confirm a market expectation and that prices had climbed to reflect the tightness of available stocks. Current prices for both feed barley and feed wheat are the highest May prices that markets have seen since 2008.

Looking ahead to next year, terrible weather during April has restricted planting, with many growers unable to get fields ready in time to plant winter wheat.

The AIMI report, which also surveys growers on planting intentions, indicates that the growers intended to plant approximately 5 per cent less area of feed wheat and 14 per cent less area of feed barley, although it notes that recent rains will likely reduce the area of wheat planted further.

Federated Farmers Grain and Seed Vice Chair, David Clark, said that he could not get machinery onto sodden paddocks and there will be many growers who will be forced to consider spring-planted wheat.

Spring-sown wheat cultivars are available but they are generally lower yielding, with less growing time available.