28 Jul 2010

No argument with gloomy outlook for arable sector

7:46 am on 28 July 2010

A crop farming representative says growers would have no argument with the gloomy outlook for the arable sector in its latest monitoring report by the Ministry of Agriculture.

The report, which looks at the horticultural as well as arable sectors, says farmer morale is low, due to the poor cereal market and limited grass and clover seed growing opportunities, which are likely to continue through the next year.

And it highlights the financial uncertainty for arable farming in the main production area, Canterbury.

Federated Farmers grain and seed chair Ian Morten, who farms in South Canterbury, confirms more cropping farmers are looking at converting to dairying or some other more profitable land use.

Federated Farmers Grains Council has also complained to the Commerce Commission about mills paying domestic wheat growers significantly lower prices than paid for imported wheat.

Grape growers also uncertain

The report also highlights financial difficulties facing grape growers.

The average Marlborough vineyard recorded a 48% drop in profits last season.

But the report says Hawke's Bay vineyards fared worse, with the average recording a loss of $28,000 for the year, due to a drop in grape demand, and falling prices.

New Zealand Winegrowers chair Stuart Smith says growers are trying to look past the difficulties they're facing at the moment, but it's getting hard because of increasing production costs.

He says growers expect tight controls on grape supply to continue over the next two to three years.