New Zealand Farmers Urge Support for Local Grain Amid Crisis

Farmers in New Zealand’s arable sector are calling for increased support from local mills and consumers as they grapple with low prices and rising production costs. According to the lobby group Federated Farmers, the situation has led to a stark divide in farmer profitability, with only 29 percent of arable farmers reporting gains, in stark contrast to the 81 percent of dairy farmers who are thriving.

The latest survey from the Arable Industry Marketing Initiative (AIMI) revealed that harvest volumes for milling, malting, and feed grain fell by 2 percent over the year, totaling 97,500 tonnes. Despite a decrease in production, unsold stocks have soared to 187,600 tonnes, raising concerns about the sustainability of the sector as farmers plan for the 2026 harvest. Projections indicate that planting areas could shrink by 7 percent, dropping to 90,500 hectares.

Challenges Facing Arable Farmers

Ivan Lawrie, general manager of business operations at the Foundation for Arable Research (FAR), emphasized the pressures facing arable farmers. He noted that while commodity prices have stagnated, production costs continue to rise. “It hasn’t been a brilliant year, and that affects the mood,” Lawrie stated. “We’ve had issues with a very wet harvest that impacted both yield and quality.”

The situation is particularly concerning for milling wheat farmers, with current production levels of 100,000-120,000 tonnes deemed unsustainable. Lawrie warned that without significant increases in local grain production, New Zealand risks losing this critical agricultural sector. He advocated for greater transparency and traceability in the local grain supply chain, emphasizing the advantages of supporting New Zealand’s arable farmers over relying on imports.

Potential Solutions for Local Grain Production

The reliance on imported grain, particularly for North Island flour mills, has drawn criticism. Lawrie pointed out that logistical challenges, such as the expensive and unreliable ferry service across the Cook Strait, have hindered the movement of southern grain to northern processing facilities. He proposed exploring options for coastal shipping and improving rail and ferry infrastructure to facilitate better transport of grain.

Collaborative initiatives involving both the public and private sectors could enhance local grain production, according to Lawrie. He highlighted the global disruptions in shipping routes over the past five years, indicating that a focus on local food production is essential for New Zealand’s food security.

In the wake of these challenges, the Commerce Commission recently approved George Weston Foods NZ to acquire Farmers Mill in South Canterbury, a notable mill that utilizes exclusively New Zealand grain. This acquisition is seen as a potential boost for the local grain market, although concerns remain about competition levels.

Future of the Arable Sector

As farmers seek to adapt to these challenging conditions, some are considering a pivot toward more profitable crops. Bevan Lill, an arable farmer from Mid Canterbury and member of the Federated Farmers’ arable industry group, noted that prices for contracted milling wheat have stagnated for 15 years, failing to keep pace with production costs.

The forage seed industry is also feeling the effects of low profitability in the arable sector. Dr. Derek Woodfield, recently retired general manager of PGG Wrightson Seeds, expressed concerns about the viability of the arable industry in New Zealand. He warned that stagnant capital gains on arable land could lead to a shift toward dairy farming as farmers seek more lucrative opportunities.

The future of New Zealand’s arable sector remains uncertain, with farmers facing pressing challenges. As they navigate these issues, the call for increased support from both local markets and the government has never been more urgent.