Survey results released by the Arable Industry Marketing Initiative (AIMI) show the overall grain harvest has been similar to last season despite drought in Canterbury which is the main production area.
The estimated total tonnage of milling wheat is down five percent on last year, but feed wheat is up three percent and feed barley is up by 11 percent.
Federated Farmers Grain and Seed representative David Clark said drought conditions during the growing season reduced the yields on unirrigated land, but that was balanced out by improved yields from irrigated areas and the overall quality has been good too.
"The irrigated yields certainly benefitted from increased sunshine hours and increased temperatures where there's good irrigation supply available, so they've had a really solid result.
For the dryland yields, the quality's been very good in those crops. Because it was dry right through the spring, the crops were able to fill the grain that they had," he said.
Mr Clark said "the worst situation you can get with a drought is where you get a very wet, bulky growth in the early spring, and then a dry pinch in December-January, where the crops crash and you get small grain and poor quality.
"But that wasn't the case this year, so fortunately those farmers with a lower yield do have a higher quality product to sell."
David Clark said it should mean there is enough grain to meet milling and stock feed demands without running into the over-supply issues of two years ago.
He said grain prices have edged back a bit from forward contract levels, reflecting the drop in dairy farmers' incomes and falling international grain prices, but have started to pick up again more recently.