CRT Urges Farmer Caution

Caution is the catchword from South Island farmers co- operative CRT, which is asking its members to spread their risk and consider all options while market prices remain volatile.

High grain prices spurred on by the high demand for feed in the local dairying sector and the international impact of biofuel crops amid the global food crisis have seen prices jump.

“Grain prices, at the moment, are very positive and farmers are probably a little bit perplexed in what to do in terms of signing forward contracts or trying to grow their cereals on the spot market for next year,” CRT technical field officer Doug Maginness says.

“The arable industry needs to think about how the current high prices for grain can be made sustainable for the long term, as we want long term arrangements with growers and end users. While dairy farmers are doing well, pig and poultry farmers are struggling at the moment because they are buying in high feed markets but getting low returns. We need them in the game so the grain and feed market is sustainable both for the grower and the producer, but at the moment they are suffering,” Maginess says.

“When prices race up they can sometimes come down again quickly, and that’s the last thing we need. We want to make those high prices sustainable.”

While the rate of dairy conversions in New Zealand has lifted the domestic feed market, the increased use of land for biofuels during a global food crisis have also played their part to present arable farmers with unprecedented market buoyancy.

Add to that the recent droughts across the Tasman, from where New Zealand has imported grain in the past, and the next 12 months looks to be very interesting for domestic growers.

“We’ve never faced this before. Prices are very firm at the moment but we need to be cautious.”

Maginness says arable farmers should use CRT as a knowledge resource which can give advice on the choices they face and help them get their produce to market.

“CRT will always look to find the best market return for growers. We can offer them all contracts and find them a home for all their products, being wheat, barley or whatever.”

CRT currently has more than 22,000 members across the South Island, and has experienced a rapid rate of growth in the last 10 years.

“When I started 10 years ago there were probably only six or seven people working for us — for example now we have 50 technical field officers spread over the South Island. So things have really grown thanks to a lot of hard working people, a lot of vision and huge support from the shareholders, farmers and clients who deal with us,” Maginness says.

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