9 Sep 2015

Dairy downturn leads to boost in growing crops

6:25 pm on 9 September 2015

The dairy downturn is hurting the arable industry but growers are just turning to other crops, Federated Farmers says.

AgriHQ's weekly market report shows the spot price for Canterbury wheat is now at $336 a tonne and barley at $317. It also reports small volumes of barley being sold for as low as $300 a tonne.

Federated Farmers arable chair Guy Wigley said those were some of the lowest prices he had heard and well below $400 a tonne, where they were sitting.

Mr Wigley said the weak prices were underpinned by a lack of demand from dairy farmers but he said it was not all bad news, because farmers were planting other crops such as peas and spring brassicas.

"The dairy industry have been solid consumers of barley in particular and also wheat.

"That has seen arable farmers enjoying good prices for wheat and barley, but the dairy industry appears to have cut its consumption back to 30 percent of what they were going to use."

Mr Wigley said wheat and barley farmers were now looking to grow alternative crops this Spring.

"Wheat will continue to enjoy steady demand from other industries, but barley was consumed in large quantities by the dairy industry, so they (growers) will have to move away from barley where possible."

He said the health of the grain industry was still quite sound.

"For arable farmers growing grass seed and oilseed rape for cooking oil, they're not dependent on the dairy industry at all.

"A lot of the grass seed is exported and the low dollar, which has come down a huge amount in the last few months, is really going to help underpin the arable industry moving forward."

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