- Key points
- Climatic factors affecting production
- Production figures
- Financial position
- Issues and trends
5 Maize (Waikato)
This commentary examines maize growing for silage and grain in the Waikato and Bay of Plenty areas.
Key points
- Both maize grain and maize silage crops recorded average yields in 2005/06.
- Maize grain crops averaged 11 tonnes per hectare in 2005/06, an increase of 0.5 tonnes per hectare from the previous year.
- Maize silage crops averaged 21 tonnes of dry matter (DM) per hectare, compared with 18 tonnes of DM per hectare last season.
- The gross margin for maize silage increased by 29 percent in 2005/06 to $919 per hectare, compared with $714 per hectare in 2004/05.
- The gross margin for maize grain in 2005/06 was $769 per hectare, compared with $677 per hectare in 2004/05.
Climatic factors affecting production
During September and October many areas of the Waikato and Bay of Plenty recorded significantly higher than average rainfall. This caused significant problems for the establishment of maize crops. Most affected were the heavy clay soils of north Waikato. As a result some growers planted shorter maturity varieties to ensure their target harvest date was not affected.
The wet spring period resulted in lower grass feed supplies on dairy farms. As a result fewer dairy farmers opted to grow maize on their properties.
Good rainfall through December and January resulted in some excellent maize growth rates during this period, and some crops were on target for record yields. However, below-average rainfall in February and March meant yields came back to average levels. Maize silage crops were more significantly affected by this dry spell than maize grain, due to the different harvest dates.
Throughout the entire maize growing period, soil temperatures have been above average.
Rust has been a problem in some maize crops this season, as a result of wet
and humid conditions.
In certain areas, particularly north Waikato, wind damage to crops was higher
than normal. This was often due to shallower than usual plant root depth, or
plant stress.
Above-average rainfall in May 2006 caused some problems for contractors when harvesting the maize grain crops.
Table 5.1: Ruakura weather data, 2005/06
| Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr | May | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rainfall (mm) | 99.4 | 122 | 86.2 | 121 | 160 | 60.8 | 153 | 105 | 40.4 | 77 | 184 | 121 |
| Mean (1972–2004) | 126 | 125 | 110 | 99 | 102 | 96 | 88 | 83 | 81 | 79 | 98 | 114 |
| % of mean | 101 | 71 | 87 | 93 | 132 | 75 | 138 | 66 | 59 | 63 | 30 | 146 |
| Soil temp (10 cm) | 8.9 | 8.5 | 8.5 | 11.9 | 15.6 | 18.2 | 20.1 | 21.5 | 21.1 | 17.6 | 15.6 | 11.2 |
Source
NIWA
Production figures
Maize silage
Maize silage is grown throughout Waikato and Bay of Plenty, with the main concentration being north of Putaruru and in the Bay of Plenty. Southern regions of the Waikato are generally too cool for good yields and are susceptible to frost, which makes the crop less financially viable. Approximately 60 to 70 percent of all maize grown in the Waikato/Bay of Plenty area is for silage.
The total area in maize silage is very difficult to gauge due to the number of small growers and the commercial sensitivity surrounding seed and input sales. Industry sources estimate the total area grown for maize silage is in the vicinity of 30 000 to 36 000 hectares. This figure has not changed much over the past few years.
Maize silage yields were 10 to 20 percent ahead of last season, meaning a return to more typical yields. The typical yield range was 18 to 25 tonnes DM per hectare, with an estimated average of 21 tonnes DM per hectare. There were few crops in excess of 25 tonnes DM per hectare.
Maize grain
The primary uses for maize grain are for animal feed in the poultry and pig industries; starch extraction; and human consumption.
Maize grain cropping is concentrated around central and north Waikato and the
Bay of Plenty. As grain crops are longer maturing, the cooler southern areas of
the Waikato are not suited to grain production.
Maize grain yields were more typical of an average year. The average crop is
estimated to be 11 tonnes per hectare, with a range of 9 to18 tonnes per
hectare. As most growing costs for maize are fixed rather than variable, yield
has a dramatic impact on the overall gross margin.
The above average rainfall recorded in April and May 2006 caused some contractors to experience significant harvesting problems. Mud and warm weather combined to cause harvesting difficulties, and in some cases affected the grain quality.
Financial position of the maize growers
Maize silage
Revenue
It has been an interesting year to sell maize silage. Many silage crops are contracted for purchase at the time of sowing. The typical purchase price for those who signed a contract early in the season was 20 to 22 cents per kilogram DM, provided the cartage distance was not excessive. If the maize had to be carted a long distance the price was as high as 26 cents per kilogram DM.
In the later part of the season it became apparent that there was a significant oversupply of maize silage to the dairy market, particularly in central Waikato. As a result there was a reduction in the price of maize silage, with some maize sold as low as 19 cents per kilogram DM including transport. This means a price to the grower of around 14 cents per kilogram DM.
Based on an average sale price of 20 cents per kilogram DM and an average yield of 21 tonnes DM per hectare, revenue increased by 8 percent to $4,200 per hectare, compared with 2004/05 ($3,885 per hectare). Note that this is more a reflection of a poor yield in 2004/05 rather than a 1 cent change in price.
Expenditure
Although there appears to be variation between contractors, there has been
upward pressure on contracting costs due to rising fuel, wages, and fertiliser
costs. The silage gross margin has reflected increased sowing, harvesting, and
cartage costs. The increases in fertiliser costs were also reflected last year.
Competition has led to herbicide price decreases, which have helped to offset
other cost increases. Overall, growing costs remained at $1,735 per hectare.
Increases in fuel and wages resulted in a 7 percent increase in harvesting,
stacking, and cartage costs.
Overall there was a 3 percent increase in the total cost of a maize silage crop, from $3,171 per hectare in 2004/05 to $3,281 per hectare in 2005/06. Total growing and harvesting costs equated to 78 percent of revenue.
Net result
The gross margin for maize silage increased by 29 percent to $919 per hectare in 2005/06, compared with $714 per hectare in 2004/05. This resulted in a gross margin of 4.4 cents per kilogram DM, compared with 3.9 cents per kilogram DM last season. This represents 22 percent of gross revenue retained as gross margin.
The main reason for the increase in the gross margin was due to crop yield increasing back to a more typical level. However, as in previous years there is significant variation in gross margins between operators, mainly due to yield variations. A yield of 16 tonnes of DM per hectare results in a nil gross margin, while a yield of 27 tonnes of DM per hectare results in a gross margin of $2,200 per hectare. As most input costs in growing maize silage are relatively fixed, the main variable is the crop yield.
Maize grain
Revenue
The price for maize grain is expected to average $280 per tonne of dry grain for the 2005/06 season, which is the same as the price received in 2004/05.
As in most years there is a wide variation in yields throughout the Waikato and Bay of Plenty, due to soil type, climate, and management influence. The average yield is estimated at 11 tonnes per hectare, which is 0.5 tonnes per hectare ahead of last season, but still below initial expectations. The range was from 9 to 18 tonnes per hectare.
The revenue for maize grain increased by 5 percent in 2005/06 to $3,080 per hectare. This compares with gross revenue of $2,940 per hectare in 2004/05.
Expenditure
In a similar fashion to maize silage, grain growing costs for 2005/06
remained at a similar level when compared to 2004/05, at $1,497 per hectare.
Increases in sowing or cultivation costs were offset by decreases in spray
costs. However, it is noted that some purchasers of grain specified the use of
particular proprietary brands of spray, meaning not all growers could take full
advantage of reduced costs.
Due to an increase in harvesting, cartage, and drying costs, the total cost to
the grower rose by 2 percent from $2,263 per hectare to $2,311 per hectare in
2005/06. Total costs equated to 75 percent of revenue.
Net result
The gross margin for maize grain in 2005/06 was $769 per hectare, compared with $677 in 2004/05 and $1,092 per hectare in 2003/04. This is a 13 percent increase in gross margin compared to 2004/05, primarily due to the increase in yield.
Table 5.2: Maize for silage gross margins
| 2003/04 ($/ha) | 2004/05 ($/ha) | 2005/06 ($/ha) |
|
|---|---|---|---|
| Expenditure | |||
| Cultivation | 315 | 320 | 330 |
| Base fertiliser | 341 | 341 | 341 |
| Sowing | 88 | 88 | 100 |
| Seed and treatment | 445 | 445 | 445 |
| Starter fertiliser | 130 | 143 | 143 |
| Weed control | 161 | 149 | 136 |
| Nitrogen – sidedressed | 210 | 240 | 240 |
| Total growing costs | 1 690 | 1 725 | 1 735 |
| Harvesting | 380 | 410 | 450 |
| Inoculant | 205 | 205 | 205 |
| Cartage | 390 | 400 | 440 |
| Stacking/covering | 320 | 320 | 340 |
| Harvest and stacking costs | 1 295 | 1 335 | 1 435 |
| Interest on inputs | 100 | 111 | 111 |
| Total direct cost | 3 085 | 3 171 | 3 281 |
| Revenue | |||
| Yield | 20 500 | 18 500 | 21 000 |
| Price (c/kgDM) | 21 | 21 | 20 |
| Gross revenue | 4 305 | 3 885 | 4 200 |
| Gross margin | 1 220 | 714 | 919 |
Source
AgFirst Consultants
Table 5.3: Maize for grain gross margins
| 2003/04 ($/ha) | 2004/05 ($/ha) | 2005/06 ($/ha) |
|
|---|---|---|---|
| Expenditure | |||
| Cultivation | 312 | 320 | 330 |
| Base fertiliser | 179 | 179 | 179 |
| Sowing | 88 | 88 | 100 |
| Treated seed | 377 | 377 | 377 |
| Starter fertiliser | 142 | 145 | 145 |
| Weed control | 180 | 163 | 151 |
| Nitrogen – sidedressed | 190 | 215 | 215 |
| Total growing costs | 1 467 | 1 487 | 1 497 |
| Harvesting | 310 | 310 | 320 |
| Cartage | 144 | 137 | 143 |
| Drying | 252 | 221 | 242 |
| Total harvest costs | 706 | 667 | 705 |
| Interest on inputs | 96 | 109 | 109 |
| Total direct cost | 2 268 | 2 263 | 2 311 |
| Revenue | |||
| Yield | 12.0 | 10.5 | 11.0 |
| Price ($/tonne) | 280 | 280 | 280 |
| Gross revenue | 3 360 | 2 940 | 3 080 |
| Gross margin | 1 092 | 677 | 769 |
Source
AgFirst Consultants
Issues and trends
Maize silage
The use of PKE as a supplementary feed on dairy farms in the Waikato and Bay of Plenty has increased steadily in the past two years. In some cases it is used to complement the feeding of maize silage, while on other farms it has replaced maize silage as the main form of supplementary feed. The net result is that PKE has emerged as a direct competitor to maize silage. This has prevented price increases in maize silage to dairy farmers, in spite of increased growing costs.
The combination of the increased use of PKE and a favourable autumn for most dairy farmers resulted in a decrease in overall demand for maize silage. Uncontracted maize silage crops fell in price, and some maize that was originally destined for silage was harvested for grain. Some purchase contracts between growers and maize silage contractors were not honoured by contractors, resulting in some tension and disputes.
Given the availability of substitute products for maize silage it is unlikely that there will be a significant shift in the price of maize silage for next season. It is possible that the demand for maize silage will fall, given the rise in popularity of PKE as a supplementary feed. However, with a number of growers having difficulty in selling their crop this season it is highly likely that there will be a reduction in the area planted in maize in the spring of 2006. This could mean that the price of uncontracted maize silage in the autumn of 2007 will be difficult to forecast as it will depend on the relative supply and demand.
The larger maize contractors are continually increasing their use of technology in cultivation and harvesting operations. Global Positioning System (GPS) tracking is becoming more widespread in sprayers and fertiliser spreaders. Many harvesters can now continuously assess the DM percentage of the crop at point of harvest. However, it would appear that subsequent use of GPS information by growers about the effects of inputs on yield to alter future management decisions is somewhat limited.
The use of vertical strip tillage for maize crops is being trialled as a means of maintaining or improving soil structure.
One Waikato contractor has purchased a maize silage bale wrapper, providing a more flexible alternative to ensiling the maize in a pit or bunker. The success of this venture is yet to be determined.
Maize grain
In the latter part of the season when it became apparent that there was an oversupply of maize silage, a number of growers tried selling their crop for grain rather than silage. As a result there was an oversupply of grain, and many purchasers closed their contracts. Maize that was not required for either grain or silage was in some cases ensiled by the grower or contractor, with the intention of using it themselves or selling it at a later stage.
The maize grain price is expected to increase by about 5 percent next season, to around $300 per tonne. This is due to the weakening of the New Zealand dollar, and the general rise in production costs of growers.
Given the general downward trend in profitability for both grain and silage growers in the past two to three years, maize growers are no longer determining the price for leasing cropping land. Lease prices of up to $800 per hectare were once common for good cropping land, but values of $400 to $700 per hectare are now the norm.
Contact for Enquiries
Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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