Horticulture and Arable Monitoring Report
9 Canterbury arable cropping
Key points
• The 2006/07 growing season can best be described as a “great cereal year” but results were variable for small seeds.
• The operating surplus for the arable model farm increased 10 percent ahead of forecast but this is reflected in increased crop on hand, not cash in the bank.
• Arable farmers’ outlook is positive for the medium term due to crop price prospects lifting in response to global biofuel demand competing for land.
• Increased grain prices will increase crop area and decrease livestock numbers for 2007/08.
• Arable farmers are improving cost efficiencies in labour, fertiliser and irrigation and, in doing so, are also improving water and energy use efficiency and reducing leaching risks.
• The viability of arable businesses with continuing negative cashflows and the resultant increasing overdraft is of major concern.
Table 9.1: Key parameters, financial results and grower forecast for the Canterbury arable model
| Year ended 30 June | 2003/04 | 2004/05 | 2005/06 | 2006/07 | 2007/08 grower forecast |
| Total effective area (ha) | 268 | 282 | 282 | 285 | 285 |
| Effective cropping area (ha) | 195 | 214 | 209 | 214 | 218 |
| Gross farm revenue ($) | 603 600 | 673 100 | 653 800 | 695 600 | 721 600 |
| Farm working expenses ($) | 336 600 | 365 100 | 393 800 | 420 600 | 428 800 |
| Cash operating surplus ($) | 267 000 | 308 000 | 260 000 | 275 000 | 292 800 |
| Farm profit before tax ($) | 201 100 | 152 000 | 96 500 | 93 200 | 105 900 |
| Ratio of expenses to gross farm revenue (%) | 56 | 60 | 62 | 60 | 59 |
| EFS1/total farm capital (%) | 2.9 | 3.2 | 2.0 | 2.1 | 2.3 |
Note
1 Economic farm surplus.
Improved financial performance for 2006/07
See Tables 9.2 and 9.3 for details of the model farm’s income and expenditure in 2006/07.
Revenue better but cash position remains poor
Total crop revenue of $560 000 is significantly up on the forecast figure of $511 000 and the 2005/06 season of $499 000. The main reason was higher cereal crop yields due to moist, cool conditions during late spring and early summer. However, other crops had mixed results due to the same climatic factors, leading to the 2006/07 growing season being described as a great year for cereals but variable for small seeds.
Other farm revenue from livestock and grazing of $125 000 (net of purchases) is in line with forecast expectations to give improved gross farm revenue of $696 000, which is $42 000 above both the 2005/06 season and forecast expectations.
The cash operating surplus is $275 000, which is 10 percent ahead of the forecast figure and 6 percent ahead of the 2005/06 season. However, farm profit before tax at $93 200 is slightly ahead of forecast and slightly down on the 2005/06 season but significantly behind the previous two years’ results.
There is a cash deficit of $46 900, similar to the previous year at $40 500. This is equal to the increase in the value of crop on hand of $47 000, bringing the total crop on hand to $416 000.
In this model, 72 percent of the crop revenue in the 2006/07 financial year is made up of crop on hand at opening; therefore, price movements have little impact on the 2006/07 revenue performance. The cash deficit means in practice that working capital debt is increased by this amount. This continues the same trend of the last three years, which means that crop on hand is now 31 percent greater than it was two seasons ago.
Expenditure increases
Farm working expenses were $420 600, up 5 percent on the forecast figure and 7 percent on the 2005/06 season. Major expenditure categories to have increased over the last financial year were:
• fertiliser, due to price rises and also the measured need for higher rates following the June 2006 snow;
• weed and pest control, due to the moist weather prolonging periods of crop disease pressure;
• fuel, due to cost increases and increased crop drying, which was required following the harvest because of moister weather.
Expenditure categories that are experiencing continued annual increases of smaller amounts are labour, seed dressing, seeds, repairs and maintenance, rates and other administration costs.
Electricity expenses have decreased significantly because of reduced irrigation activity in this season due to plentiful rainfall. Reports of pumping hours being reduced by up to two-thirds of normal annual amounts have been received.
Expenditure as a proportion of gross farm revenue continues to hold at around 60 percent.
Total debt servicing costs have increased as a result of both an increase in the amount of short-term debt (working capital) required and higher interest costs on long-term debt. In the model budget, a proportion of long-term debt has been refinanced but at higher rates. Interest rates on working capital have increased by around 2 percent.
Farmers held discretionary expenditure items such as capital and development expenditure at around the level of depreciation on plant and equipment. This suggests farms are maintaining their capital capability, awaiting an improvement in the financial performance of the business. Despite reasonable profitability, capital expenditure remains at maintenance level, as the cash position has deteriorated.
Equity improves
The continuing appreciation of farm land values has been the major contributor to the lift in the total assets of this model in recent years. During the 2006/07 year, total farm assets increased by 4 percent, from $6.32 million to $6.57 million, after rising 12 percent last year. Indebtedness has risen marginally in the form of working capital, but the equity positions of arable farmers have strengthened during the year.
Contribution from cereals improves
The good cereal yield performance has driven the improvements in farm financial performance for 2006/07. Cold and overcast conditions with plentiful rainfall during November through to January meant that cereal crops were able to achieve excellent yields, particularly on dryland crops. Climate details for the season are provided in Appendix 3, Table A22 and Figures A1–A4.
The average wheat yield of 9.3 tonnes per hectare is well up on the forecast of 8.7 tonnes per hectare and last season’s actual yields of 7.7 tonnes per hectare. Barley and other cereals showed similar increases on previous seasons. The exceptions to this were wheat crops sown immediately prior to the June snows. These crops were typically slow and poor to establish, which resulted in disappointing harvest yields.
High wheat yields have meant that it has been difficult to achieve high protein levels, with indications of early assessments of milling wheat showing that a proportion has proteins below contract specifications. Other milling and feed quality parameters appear to be satisfactory.
A lift in international grain prices, which is lifting the price of equivalent crops in New Zealand, has had only a small flow-on impact on the 2006/07 financial returns. This is because the majority of the crop sold in this season was contracted at values set in May 2006. There has been some lift in free (that is, non-contracted) crop prices.
Small seeds variable
The weather conditions caused variable outcomes for small seeds. Average grass seed yields are slightly up on forecasts, while clover seed yields are slightly back. Some specialist seed crop species had very poor harvest results, in terms of both yield and quality.
The area of ryegrass seed grown was well back on last year and the variety mix was different. Early season crops were of poor quality because the extended flowering season caused a higher proportion of low germination seed. Later crops generally performed better this season. Some very good ryegrass seed yields were recorded.
For clovers and other specialist vegetable and brassica seed crops, poor heat units for flowering and maturity, reduced bee activity and greater-than-usual vegetative growth reduced yields and caused quality problems. Ground and air temperatures that were several degrees below average over a number of months delayed harvest by two to four weeks. It was difficult to choose an optimum harvest time to suit the range of seed maturities in the crop. Some clover seed crops were harvested for silage to take advantage of the favourable feed market as farmers rebuilt feed stocks following the 2006 snow. Eventually, harvest conditions became favourable and very few crops were total disasters, although many seed dressing and testing results had yet to come in at the time of writing. Carrot seed crops were particularly badly affected.
Other crops steady
Grain pea crops were reduced in yield from previous years, although early crops yielded well because they flowered before the colder weather. Pasture and cereal silages performed at near record levels as a result of favourable growing conditions, but maize crops suffered with the lack of heat units and produced slightly lower yields and therefore lower returns to growers. Process vegetable crops performed well, although maturity was delayed by the cool weather.
Livestock important contributor
Livestock returns in this financial year have been on a par with previous seasons, with healthy margins in lamb trading.
The snow event in June 2006 caused major difficulty for those arable farmers grazing dairy cows. Stock had difficulty getting to the feed crops while under snow cover, so alternative feeds had to be provided. Wet conditions as the thaw set in led to significant pugging damage to soils. Some of these areas will need to be retained in pasture for several years in order to restore soil condition.
Continuing optimism in 2007/08 forecast
See Tables 9.2 and 9.3 for details of the model farm’s forecast income and expenditure in 2007/08.
Revenue expected to improve further
Total crop revenue is forecast by farmers to be $620 000, 11 percent up on the $559 000 of the 2006/07 season. This is due to an intention to increase the area of crop grown, mainly cereals. Other farm revenue at $132 000 (net of stock purchases) is 18 percent behind the 2006/07 year as a result of the slight reduction in livestock and reduced grazing. Despite this, the gross farm revenue forecast of $722 000 is $26 000 or 4 percent above the 2006/07 season.
This translates through to a 6 percent rise in operating surplus. Increased interest costs and tax combine to reduce the increase in profit after tax to only $4000. Once again, crop on hand increases by $48 000, so there remains a cash deficit of $23 000.
Expenditure rising and under tight control
Farm working expenses are budgeted to lift by 2 percent on last year to $429 000. There are major increases in electricity expenses expected, based on a return to a normal irrigation season and fertiliser as a result of expectations of increased prices. Urea is expected to increase by more than $100 per tonne compared to 2006/07. There is a slight increase in most other expenditure items, and some optimism that repairs and maintenance expenses can be reduced. Industry observers noted that the overall forecast for farm working expenses may be underestimated by the farmers.
A 10 percent increase in interest payments is expected by arable farmers, due to rising interest rates and ever increasing working capital requirements.
Capital and development expenditure is expected to be kept at similar levels to last year. There is recognition in this group that they need to maintain capital replacement and complete development programmes to be sustainable. Every capital purchase is carefully considered.
Despite the favourable revenue outlook, personal drawings are being kept under tight control.
Crop and livestock changes
The crop mix and area cropped will change for the 2007/08 harvest. The combination of improved cereal prices and poorer outlook for sheep meat has caused farmers to increase their cereal area or harvest a greater area of silage, and reduce their livestock numbers.
This is due to the positive market signals coming from the global cereal sector. Factors driving this are the tight world supply due to recent droughts in Australia and other key exporting countries, diversion of land from feed grain to biofuel production, and expectations of increased feed grain demand from the Canterbury dairy industry.
The poor short-term outlook for sheep meat returns has caused farmers to contemplate replacing livestock in their systems. There has been a reduction of capital breeding stock, for those farmers who still have them, and a lower level of purchases of trading lambs to take into winter 2007.
Spring crop options for farmers should be plentiful, and the available land may be constrained because of increased autumn crop plantings.
Autumn crops off to good start
Autumn wheat, ryegrass and clover crops benefited from the dry, warm weather conditions right through to the end of May. As a result, crop establishment was excellent and crops went into the winter in satisfactory condition. Initially, there was some concern that, because the harvest was later than usual, establishment of autumn-sown crops would be affected. The forecast budget reflects cereal crop yields at a level very similar to last year, which is well ahead of long-term average yields. There may be some overly optimistic views for dryland yields.
There has been a lift in the cereal prices being offered to cropping farmers in New Zealand. Milling wheat contracts have led the way in increasing cereal returns, with the lead contract offer of $350 per tonne being quickly filled. As a result, expectations of feed grain prices and returns from all relative crops have increased.
Other seed crop yields are expected to lift on last year and return to a more average expectation of crop performance. There is a small increase in the grass seeds area as a result of a 10 to 15 percent improvement in the price, increase in tonnages required by buyers and the range of crop options available. However, prices for clover and other cropping options have not increased significantly and returns are budgeted at about the same as last year. An overhang of unsold clover seed remains in the market.
Spring crop prospects good
Because of increased autumn crop plantings, less land is likely to be available for spring crops. Farmers are hopeful this will lead to some upward pressure on grower prices to obtain sufficient area to service world seed markets. Pea areas are likely to be down as farmers drop the poorer-returning crops. Expectations of barley prices that reflect global cereal prices have been built into the budget.
Livestock expectations lower
Livestock trading margins are expected to be reduced compared with lambs finished in winter 2006 as a result of lower sheep meat price expectations. However, the purchase price of trading lambs has adjusted accordingly. The model budget reflects fewer livestock and slightly reduced margins.
The increase in cereal feed prices and signalled increase in dairy payout has raised arable farmers’ expectations of flow-on increases in grazing and silage prices. The model reflects a lower area of grazing, as the crop area has increased, and a modest expectation of grazing and silage price increases. The dairy industry is now a major client of the arable industry.
Table 9.2: Canterbury arable cropping budget
| 2006/07 | 2007/08 grower forecast | |||
|
Whole farm ($) |
Per ha ($) |
Whole farm ($) |
Per ha ($) | |
| Revenue | ||||
| Cereals | 213 752 | … | 245 076 | … |
| Small seeds | 215 721 | ... | 242 306 | … |
| Other crop | 43 318 | … | 41 230 | … |
| Process/fresh vegetables | 29 790 | … | 39 897 | … |
| Land leased for cropping | 9 990 | … | 3 600 | … |
| Change in value of crop on hand | 47 359 | … | 47 679 | … |
| Total crop revenue | 559 930 | 2 616 | 619 787 | 2 843 |
| Sheep income (including wool) | 167 599 | 588 | 139 942 | 491 |
| Grazing income | 32 800 | 115 | 25 500 | 89 |
| Other farm income | 17 500 | 61 | 15 000 | 53 |
| Less: | ||||
| Sheep purchases | 75 690 | 266 | 63 520 | 223 |
| Stock value adjustment | – 6 500 | – 23 | – 15 140 | – 53 |
| Gross farm revenue | 695 639 | 2 441 | 721 569 | 2 532 |
| Farm working expenses | 420 573 | 1 476 | 428 752 | 1 504 |
| Cash operating surplus | 275 066 | 965 | 292 817 | 1 027 |
| Interest | 109 770 | 385 | 113 501 | 398 |
| Rent and/or leases | 7 500 | 26 | 8 000 | 28 |
| Minus depreciation | 64 575 | 227 | 65 400 | 229 |
| Farm profit before tax | 93 221 | 327 | 105 916 | 372 |
| Taxation | 11 585 | 41 | 20 503 | 72 |
| Farm profit after tax | 81 636 | 286 | 85 413 | 300 |
| Add back depreciation | 64 575 | 227 | 65 400 | 229 |
| Reverse stock and crop value adjustment | – 40 859 | – 143 | – 32 539 | – 114 |
| Off-farm income | 4 000 | 14 | 4 000 | 14 |
| Discretionary cash | 109 352 | 384 | 122 274 | 429 |
| Applied to: | ||||
| Net capital purchases | 60 000 | 211 | 40 000 | 140 |
| Development | 12 711 | 45 | 22 800 | 80 |
| Principal repayments | 32 500 | 114 | 32 500 | 114 |
| Drawings | 51 000 | 179 | 50 300 | 176 |
| New borrowings | 0 | 0 | 0 | 0 |
| Introduced funds | 0 | 0 | 0 | 0 |
| Cash surplus/deficit | – 46 859 | – 164 | – 23 326 | – 82 |
| Assets and liabilities | ||||
| Farm, forest and building (opening) | 5 457 000 | 19 147 | 5 655 000 | 19 842 |
| Plant and machinery (opening) | 430 500 | 1 511 | 436 000 | 1 530 |
| Stock valuation (opening) | 67 915 | 238 | 61 415 | 215 |
| Crop valuation (opening) | 368 614 | 1 293 | 415 973 | 1 460 |
| Other farm-related investments | 0 | 0 | 0 | 0 |
| Total farm assets | 6 324 029 | 22 190 | 6 568 388 | 23 047 |
| Non-farm assets | 0 | 0 | 0 | 0 |
| Total assets | 6 324 029 | 22 190 | 6 568 388 | 23 047 |
| Total liabilities (opening) | 1 291 100 | 4 530 | 1 383 600 | 4 855 |
| Total equity (assets and liabilities) | 5 032 929 | 17 659 | 5 184 788 | 18 192 |
Symbol
… Not applicable
Table 9.3: Canterbury arable cropping expenditure
| 2006/07 | 2007/08 grower forecast | |||
|
Whole farm ($) |
Per ha ($) |
Whole farm ($) |
Per ha ($) | |
| Farm working expenses | ||||
| Permanent wages | 32 490 | 114 | 33 915 | 119 |
| Casual wages | 4 275 | 15 | 2 850 | 10 |
| ACC – employees | 937 | 3 | 719 | 3 |
| Total labour expenses | 37 702 | 132 | 37 484 | 132 |
| Contracting (including harvesting/drying) | 12 825 | 45 | 12 255 | 43 |
| Animal health | 4 703 | 17 | 4 560 | 16 |
| Breeding | 285 | 1 | 285 | 1 |
| Electricity | 18 212 | 64 | 23 085 | 81 |
| Feed (hay and silage) | 3 905 | 14 | 3 420 | 12 |
| Feed (crops) | 0 | 0 | 0 | 0 |
| Feed (grazing) | 0 | 0 | 0 | 0 |
| Feed (other) | 2 195 | 8 | 1 568 | 6 |
| Fertiliser | 71 937 | 252 | 80 197 | 281 |
| Lime | 5 130 | 18 | 5 130 | 18 |
| Freight | 14 421 | 51 | 15 675 | 55 |
| Seed dressing | 29 700 | 104 | 29 000 | 102 |
| Seeds | 24 760 | 87 | 23 940 | 84 |
| Shearing costs | 2 020 | 7 | 1 820 | 6 |
| Weed and pest control | 71 650 | 251 | 72 100 | 253 |
| Fuel | 27 788 | 98 | 28 785 | 101 |
| Vehicle costs (excluding fuel) | 20 292 | 71 | 18 383 | 65 |
| Repairs and maintenance | 29 640 | 104 | 26 648 | 94 |
| Total other working expenses | 339 460 | 1 191 | 346 849 | 1 217 |
| Communication costs (phone and mail) | 3 477 | 12 | 3 420 | 12 |
| Accountancy | 4 218 | 15 | 3 990 | 14 |
| Legal and consultancy | 3 990 | 14 | 4 133 | 15 |
| Other administration | 2 993 | 11 | 2 565 | 9 |
| Rates | 8 550 | 30 | 8 978 | 32 |
| Insurance | 12 255 | 43 | 12 255 | 43 |
| Water charges | 1 425 | 5 | 1 425 | 5 |
| Other expenditure | 6 503 | 23 | 7 654 | 27 |
| Total overhead expenses | 43 411 | 152 | 44 419 | 156 |
| Total farm working expenses | 420 573 | 1 476 | 428 752 | 1 504 |
| Wages of management | 75 000 | 263 | 75 000 | 263 |
| Depreciation | 64 575 | 227 | 65 400 | 229 |
| Total farm operating expenses | 560 148 | 1 965 | 569 152 | 1 997 |
| Calculated ratios | ||||
| Economic farm surplus (EFS1) | 135 491 | 475 | 152 417 | 535 |
| Farm working expenses/GFR2 | 60% | 59% | ||
| EFS/total farm assets | 2.1% | 2.3% | ||
| EFS less interest and lease/equity | 0.4% | 0.6% | ||
| Interest + rent + lease/GFR | 16.9% | 16.8% | ||
| EFS/GFR | 19.5% | 21.1% | ||
Notes
1 EFS (or earnings before interest and tax) is calculated as follows: gross farm revenue, less farm working expenses, less depreciation, less wages of management (WOM). WOM is calculated as follows: $31 000 allowance for labour input plus 1 percent of opening total farm assets to a maximum of $75 000.
2 Gross farm revenue.
Implications and analysis
Business viability remains under pressure
The major area of concern for arable farmers is the continuing negative cashflow and increasing size of their overdraft. For most farmers, the account balance is used as an indicator of how their finances are performing. Watching the overdraft steadily increasing every year is causing continued concern. There are several factors that make it unlikely that this will change. One is that the timing of crop production and its subsequent use is changing. Wheat makes better flour if stored for at least three months. Seeds need to be managed onto the market to match demand, so split payments to growers are an inevitable part of securing a contract. The likelihood of increased demand for grazing, silage and feed grains from the dairy industry may help the cashflow for farmers. The poor cashflow also acts as a barrier to entry for other would-be crop growers.
On-farm development continues to be low as a result of poor cash results and increasing working capital debt. The most significant area of development activity is improved irrigation capability. This is driven by concerns that access to water will be severely constrained in the future and that the window of opportunity to access irrigation water is closing. Some capital expenditure on irrigation equipment has been forced on farmers to maintain water consents. The economics of irrigation capacity development is well recognised, with increased investment in on-farm application efficiency and reliability improvements.
Plant and machinery replacement continues at a level barely sufficient to maintain the total value of plant on-farm. When plant is due for replacement, careful consideration of factors (such as labour and energy use and, increasingly, the impact on the soil and water resource) is undertaken to ensure a good return on capital invested. Many of the hire purchase and vehicle loans associated with the high level of purchase of large items of machinery three years ago will finish this season with retention of the equipment. This will result in an increasing repairs and maintenance bill rather than plant replacement. Some farmers are increasing their use of specialist contractors, such as for spraying and fertiliser application, in lieu of replacing ageing plant. Charge-out rates for the specialist servicing required for modern machinery are continuing to rise.
Industry commentators observed that viability pressures have been evident over many years and are a characteristic of the arable farming group. The outcome has been that arable farmers who achieve profits that are lower than average (due to a combination of less scale, lower risk profile, skills and/or stage of life) tend to exit the industry more steadily than in other sectors. There is also somewhat less focus on the profitability of the farm system as a whole, more evident now than in the past, because of high net worth, making some farms vulnerable to financial shocks.
Industry issues and developments
Market prospects are positive
Arable farmers’ outlook is positive for the medium term. Their perception is that world stocks of grain will continue to be relatively low for at least a few years. While Australia’s drought has ended and expectations of a return to normal cereal production are recognised, grain production globally is still constrained by land availability, and demand for biofuels continues to grow. The increase in payout for dairy farmers is also improving farmers’ outlook.
On the seed production side, the recent international seed congress in Christchurch is expected to further enhance New Zealand’s reputation as a producer of high-quality seeds. There are increasing opportunities for seed sales in South America and Australia and within the New Zealand pastoral sector.
Land management approaches improving
Farm stewardship and the awareness of the impacts of farming practices on the environment is improving and is reflected in the increased adoption of management practices that reduce the impact of arable farming on the environment. A good example of this is the rapid uptake of deep nitrogen soil testing. The research organisation that is funded by industry levies, the Foundation for Arable Research (FAR), noted at a recent forum on water quality that the number of deep soil nitrogen tests performed by the main sampling company had doubled to 379 since 2002. Farmers improve their profitability and nitrogen efficiency by balancing the pool of nitrogen in the soil with nitrogen fertiliser application. There are also more irrigation-monitoring probes being installed to improve water management.
Primarily, these practices are driven by the need to improve labour, energy and fertiliser efficiencies to improve financial viability. But arable farmers are well aware of the potential impact of negative publicity on environmental management, so are conscious that reducing risks of leaching and improving water use efficiency are also important outcomes from improving management practices.
The overall standard of agronomy and farmer technical expertise continues to improve within the arable farming sector. There is strong participation in FAR, as well as uptake of the science and technology that this group promotes. There is concern about the lack of scale in the arable industry and therefore the ability to invest in sufficient research. The lack of scale means there is a limit to the amount of direct research being carried out to assess the impacts of arable practices on the environment and produce appropriate responses for on-farm uptake.
Land use changes
The trend in the model to growing more cereals is recognised as being a short-term response to higher prices and that systems that are too highly geared to depletive crops, such as cereals, are not sustainable. However, many restorative break crops (for example, peas) are increasingly less economic to grow.
With the increased profitability of grains relative to sheep production, there is likely to be an increased area of crops grown in areas previously used for livestock production. This is expected to occur in areas of lighter soils and where the climate is considered to be less conducive to high and/or consistent crop performance.
Industry commentators noted that arable farmers have mixed views on converting to dairy farming. Advisors report an increase in enquiries, but the outlook for arable farming is better than in recent years and the capital costs of conversion to dairy farming are high. Those who have not already converted are unlikely to do so on relative profitability grounds, but some farmers may be at a stage of life where a change in lifestyle is being considered. The dairy payout announcement may provide further impetus for these farmers.
Biofuels: the new gold?
The potential for the biofuel industry to expand into New Zealand is causing both optimism and concern in the arable industry. On the one hand, global biofuel demand is raising all crop prices globally. Even where a crop is not directly related (for example, vegetable seeds), the bargaining power for New Zealand is increased as European farmers find cereals or oilseeds easier to grow than vegetables for seed production, thus increasing the opportunity for New Zealand vegetable seed exports.
However, for those farmers and industry involved in the production of specialist brassica seeds, the prospect of canola production in New Zealand is seen as a threat to their industry. Separation distances must be maintained between canola and brassica crops, which may cross-pollinate; otherwise, seed of sufficient purity is not produced. If large areas of canola crops are grown, this will severely reduce the potential area available for brassica seed crop production. For some farmers, particularly those who run less-intensive mixed livestock and crop systems, the prospect of growing canola as a new spring crop option is very attractive in an environment where there are few profitable options. There is at least one company publicly seeking to develop a biodiesel industry that will be based on canola production. Growing canola outside the mid-Canterbury specialist seed production area is seen as the preferred solution by most people in the seed industry.
Questions remain about the medium-term economic viability of a biofuels production industry in New Zealand without the use of subsidies to encourage biodiesel production. Arable farmers are hoping that the global biofuels movement will lead to a structural change in world cereal markets that will curb the continuing decline in real prices, rather than representing a short-term policy-driven phenomenon.
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
Contact this person
