27 Sep 2012

Outlook good for grain, says Fed Farmers

10:04 pm on 27 September 2012

Federated Farmers says more grain price rises in New Zealand are likely, driven by overseas conditions.

Its national grain and seed chair, mid Canterbury grower Ian Mackenzie, says further grain price rises here are likely, driven by overseas conditions.

He says milling wheat contracts are all $420 to $430 a tonne, the expectation for free grain could be mid-$400s, and feed grain prices are up about $400 a tonne.

Mr Mackenzie says provided they get reasonable growing conditions, grain and seed growers are looking at another positive year, following good yields and the lift in cereal and seed prices that restored their profitability last season.

But he says there are negative factors at work as well, including a high exchange rate.

"The dairy industry is starting to look a little less buoyant and the pig industry's been under considerable stress from cheap imports, so the demand might be down."

A recent Ministry for Primary Industries report is also forecasting another good year for New Zealand grain and seed growers.

It says arable farm profit before tax for the past year increased by more than 130% on the previous poor season, driven in part by good yields, and higher cereal and seed crop prices.


It says forward contract prices for wheat and barley have been going up in recent months and and it's forecasting high profit levels again in the 2012/13 season.