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Seeds Feature
CONTACT US Canterbury Farming 03 347 2314
September 2012
Nutrient Cap A threat to arable flexibility by Hugh de Lacy
The imminent rise in grain returns might conceivably slow the tide of conversions of arable farms to dairying, but Environment Canterbury’s (Ecan’s) draft nutrient-cap rules will ensure it doesn’t That’s the view of Valetta, Mid-Canterbury, arable farmer David Clark, the vice-chairman of Federated Farmers Grain and Seeds section. The Proposed Canterbury Land and Water Regional Plan, for which submissions close on Friday, October 5, will, if adopted, “stop in its tracks any form of land-use change or intensification, including from sheep-farming to arable farming,” Clark told Canterbury Farming. The nutrient-capping part of the proposal would require a resource consent for any increase above 10% in the average nutrient losses of a farming system over the three-year rolling average. “If you’re in the red zone, which most of Canterbury is, that (degree of nutrient loss) is a non-complying activity,” Clark said. “Ecan are telling us that consent would only be granted
if you’re a true exception to the norm. “It’ll make any form of land-use intensification difficult,” and that might include irrigating a formerly dryland farm. “I don’t know how they could proceed an irrigation scheme on the basis of what’s proposed,” Clark said. The proposals have been tabled at a time when grain prices globally are taking off under the influence of drought throughout most of the Northern Hemisphere summer just passed, and an unusually cold winter in Australia thumping production there. As a result, New Zealand arable farmers are facing the immediate future with “cautious optimism,” Clark said. “The United States and Russian droughts caused a knock-on effect of lifting the (global) wheat price,
which now in turn has caused dairy commodities to stage a comeback, which is then giving the possibility of a lift to one of our major end-using industries here in New Zealand.” This spring is seeing “a bit of a swing to planting milling wheat, because it’s scarce internationally, and that potentially should see an upturn in price. “Also there’s going to have to be an upturn in price if there’s to be more wheat going to the mill.” Clark reckons the price for milling wheat should be around the mid-400s in dollars per tonne, but it’s got a way to go before it reaches that. There was increasing pressure also coming on feedgrain supplies, the world was “fundamentally short of food,” and that was a trend that was only going to continue, he said. The United States great mid-western cropping belt and Russia’s Black Sea area had born the brunt of the Northern Hemisphere droughts, but China and India had also been hit hard. This has been reflected in wheat futures prices on the US market which shot from
around 650c/bushel at the end of June to around 900c this month. The feeding out of wheat is expected to be ‘sharply higher’ in the US in the 2012-13 marketing year, according to Rabobank’s latest Agribusiness Review, resulting in lower global rowcrop production. Over the ditch, Australia’s high dollar is not expected to hinder a further 3-5% rise in price over the last quarter of this year. Aussie winter wheat production this year plunged 20%, because of the JulyAugust cold snap across eastern Australia and parts of Western Australia, to less
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than 23m tonnes, and China is further stirring tightening supply by importing up to 3m tonnes of that as feed-wheat. Meanwhile, New Zealand’s switch into cooler weather patterns over the past couple of years has left arable country in good heart, with aquifers recovered from the low levels of the previous decade. “The future’s got to be positive,” Clark said. “What’s essential for New Zealand though is that we retain ownership and control of our productive agricultural assets, and also retain the ability to farm effectively and sustainably.”