The latest Arable Industry Marketing Initiative report shows unsold stocks of cereal grains for the 2023 harvest have more than doubled since the same time last year.
For the 2022-2023 season, cereal grain production of wheat, barley and oats in New Zealand totalled an estimated 836,000 tonnes, up 9% on the previous harvest.
Maize grain production was estimated at 164,400t. Total production of grain in NZ was therefore estimated to be 1,000,300t.
When compared to the same time last year, unsold stocks of cereal grain over all six crops are estimated to have more than doubled to sit at 105% higher, the report states.
As of October 2023, unsold stock of feed wheat was estimated at 32,900t, up 15,000t on last year, and feed barley 53,500t, up 29,800t on the previous year.
On-farm storage of sold grain is up 55%, 90,300t, on this time last year.
Total on-farm storage, including both sold and unsold grain over all six crops, is up 67%, 147,500t, compared to October 2022.
The total area sown or intended to be sown in cereals is predicted to be 94,300 hectares, which is down 3%, or 2900ha, on last season.
About 87% of this total area had been sown by October, being similar to the 86% average over the previous nine seasons.
Across the ditch in Australia, GrainCorp is continuing to perform strongly, having released its annual report for the fiscal year, recording its second highest earnings.
The latest NZX grain and feed insight reports the company had EBITDA of AU$565 million ($612m) for FY23, spurred by a record crush volume in its processing business.
This is its second highest earnings result behind its record-setting AU$703m in 2022.
Overall, the company achieved a NPAT of AU$250m compared with AU$380m in FY22.
This is Australia’s third straight bumper crop, with GrainCorp handling 37.4 million tonnes of grain, down from 41.1 million tonnes, a 9% decrease year on year.
It exported 8.3 million tonnes, down 9.8% on last year’s volume of 9.2 million tonnes, but still the second highest export volume in the space of a decade.
Agribusiness reported EBITDA of AU$401m compared with AU$624m in FY22, noting strong results across feeds, fats and oils (FFO), still above historical averages.
This was noted to be driven by significant global demand for renewable fuel stocks and strong supplementary feed demand in both New Zealand and Australia.
Processing reported record EBITDA of AU$153m, up from AU$127m in FY22, with the oilseeds business increasing earning key market indicators significantly.
NZX dairy analyst Rosalind Crickett said the general outlook from GrainCorp for the 2023-24 season will continue to be strong, despite being lower than the 2022 record results and El Niño confirmation in Australia.
Meanwhile global grains are forecast to reach record production with the Food and Agriculture Organisation (FAO) of the United Nations predicting global cereal production to reach a record 2.81 billion tonnes this year according to its Cereal Supply and Demand brief.
The report pointed to higher projected coarse grain production in most of West Africa and China following larger than anticipated plantings, yielding stronger crop harvests.
Lower forecasts for the European Union and United States were both attributed to unfavourable weather conditions.
Global wheat production forecasts are roughly level with October’s forecast, but down 2.2% year on year.
The report also highlighted global wheat supplies higher than initial predictions in the US. This, coupled with strong export competition, resulted in a 1.9% wheat price decline in October.
In NZ, Canterbury wheat prices have significantly fallen year on year, with milling wheat currently at an average $515/t down from $667/t this time last year while feed wheat is also down to $458 from $653 in Canterbury, with Southland at $471 down from $647 and Manawatū at $580 down from $680.
Feed barley has dropped more than $200/t, currently at $437 in Canterbury from the $650 this time last year while Southland is similar at $463 down from $657.
Maize has taken a dive at an average $540/t in Manawatū, down from $745 this time last year, while in Waikato the drop is significantly less at $600 down from $693.
With no significant global or domestic indicators for improvement, NZ arable farmers are looking for increased yields to help bridge the price gap in the upcoming harvest.