April 22, 2026 • 21 mins
While the Ag Sector has been on an upswing, one primary sector is still feeling the pinch: Arable Farmers. What's behind the struggle? Why are some looking to leave the sector in search of greener pastures? What impact will the Watties and McCain's frozen veggie closures have on the sector? And what can we do to support the industry?
Joining the conversation to answer these questions and more is Federated Farmer's Arable Group Chairperson and arable farmer based out of Leeston, David Birkett.
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Episode Transcript
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(00:10):
Welcome to Blue Shed Diary, a podcast about and four our
farmers and growers. I'm Milton Munroe, your host and
PSG brides and technical team manager.
The egg sector has been on a bitof an upswing recently and
confidence is certainly higher than it has been in years.
But there's one sector that is really still feeling the pinch
and that's New Zealand's arable farmers.
(00:33):
Some of the questions I want to answer to get answered today
are, you know, what's behind this struggle and why are some
looking to to leave the sector, looking for some perhaps greener
pastures. So joining the conversation
today to help me get some answers is Leiston Pharma and
Federated Farmers Arable Group Chair David Brickett.
Welcome to the show, David. Yeah.
Thanks Milton and and thanks forhaving us on.
(00:55):
No air pleasure. So arable farmers are having a
little bit of a tough time of itat the moment.
So can you just take us through what are the factors at play
here that are causing a bit of downturn in in the arable
industry? Yeah, I, I guess there's quite a
long back story to where we why we've, how we've got here
essentially. But I guess what's brought it to
a head is we've had now two seasons and are particularly in
(01:18):
Canterbury of Paul Harvest and in some areas in Canterbury have
three years now. And so you, we all know when we
have a poor weather conditions, you know, that puts a lot of
financial pressure on. But the story really probably
starts back 10 to 15 years ago. And over the last 10 to 15
years, we've was just seeing a gradual decline away in margins.
(01:42):
And, and we've also seen a shiftwhere previously we have had
some more exposure to our domestic economy and our
domestic economy has been able to deliver us some premiums over
global economies. But since COVID, we've we've
certainly seen a shift where we now live in the true global
economy. And you know, a lot of the
(02:03):
prices which we get are whateverthat commodity is, whether it's
grain or, or whatever the product is, the multiplications
of seeds, whatever that product has landed in New Zealand as the
price we get. And you know, five years ago
when the dairy industry was going well, we would probably
have seen maybe a $50 premium for New Zealand grains above
(02:26):
imported grains, but that their premiums gone now.
And we we do live in this globaleconomy.
So essentially the story is as the inflation has eroded, the
costs away and the margins haven't made-up for that.
And because we're on a global stage, we're competing against
countries that are a lot larger in scale.
(02:48):
So if we look at the grain, you know, we're competing against
Argentina and Australia where costs of production are
significantly lower, like we're talking 75% lower on some of
these areas. And they, a lot of those
countries also have some subsidisation as well.
So it's it's not not really level playing field, but that's
where we find ourselves operating.
(03:10):
And yeah, it's come to a head with the two wet harvests.
But now with the Iran war as well as we all know, we are
seeing fertiliser and fuel costsramping right up.
So that's probably brought it toa real head now where we are now
starting to discuss with the rest of the industry, the, the
scene companies, the flour millsand everyone, how do we get
(03:35):
through this? And how do we design A better
arable system to because what's worked for the last 40 years
doesn't appear to work in the current new world that we're, we
find ourselves in. So that's really we were, we
were at and we've, we've, I guess we've subsidised our
cropping industry with some livestock over the last few
(03:56):
years, while the livestock sector has been in a better
position. And that is probably masked some
of the, the downside of croppingindustry.
And that the returns on the livestock component in the
arable farm have allowed us to remain viable.
But yeah, not, not so much this this year, particularly with the
(04:19):
cost that we are going to see inthe spring.
We don't know what those costs are going to be like, but we
know they're probably, they're certainly going to go one way.
You paint a pretty a bleak picture there of our arable
industry, which is a that's a real shame.
It's certainly been a been a bitof a powerhouse for New Zealand
for a number of years. You've already mentioned
(04:40):
diversification. You know, grain farmers actually
bring in more animal and animalsand we've seen a lot of them
doing things like winter grazingor even actually setting up
their own small mobs and, and trying to capitalise on beef
markets and anything they can. Is that diversification helping?
Yes, it does. I think you need diversification
(05:01):
across any farming business is agood is a good thing.
And I guess arable farmers have always had a lot of
diversification because particularly in Canterbury we
grow a lot of different crops. So you know, we grow about 10
different crops on the farm. So that gives us diversification
within the cropping. But the problem we've got at the
moment is all of those crops have low margins or
(05:23):
profitability. So you need to look beyond the
cropping side of it and that's where the livestock comes in.
And obviously the livestock's returning well and a lot of
arable farmers last year did well because we were able to buy
store stock at lower prices and we got the gain off the market,
whereas this year slightly different and that we are paying
(05:45):
the market price. So, you know, there were
probably $80 a hit ahead of whatwe're paying for store lambs
this year, and that's certainly a good way to drain the bank
account. Yeah, no, I can certainly
imagine. Are we seeing some arable
farmers actually leaving the industry, actually making the
the switch and heading into something like dairy?
(06:07):
Yeah. It depends where you are on the
country and what the regulationsand rules of your Regional
Council are. In Canterbury, we've seen some
of those rules become less stringent and we have seen a
number of people move over to dairy.
So I think last year there was about 15 conversions.
Some, a lot of those are arable,but some will be from dairy dry
(06:30):
stock farms. This year.
We're seeing a significant number again of I've heard of
about 30 so far and they are some of our better farmers and
some of our better farms. So previously in the 2000s when
we had a very boom, it was more of the marginal ground that went
to dairy. This time round we're actually
(06:51):
seeing some of the the better ground go and the, and the
skills of those farmers we lose as well.
So that's one of the concerns wehave is that, you know, we lose
the the the ground that's best for arable, but also the skills
that go with it. So, so yeah, we will see the
number go to dairy, but we'll also see a number and increase
the component of livestock. So you know, an arable farm may
(07:13):
have teen percent livestock as part of their income and 90%
normally with the crops. Yeah, we could see that swing to
closer to a 5050 and and we can do that quite easily, but we do
have to bring their capital stock on and buy that in.
So that's another challenge, butit's certainly a cheaper
challenge than doing a dairy conversion at the moment where
(07:35):
we're seeing some numbers of around 30,000 hectare just to do
a full conversion from an arablefarm.
So that's significant investmentthat's being made there.
And, and once you've made that investment, those farmers won't
won't be going back anytime soon.
No, they won't be, that's for sure.
Um, slight change of tact here. You know, we're talking at the
(07:58):
min number of pressures that arecoming onto our arable growers
in New Zealand, but it's not just a New Zealand problem too,
is it? Open up some of the, the global
farming literature that's out there and you're hearing the
same issues coming from growers and the places like the UK.
I was in the the States for a couple of conferences last week
talking to some of the large arable growers there.
(08:20):
Exact same issues, maybe some slight variations, but globally
the arable market is not is isn't looking good.
Yeah. And that is one of the
challenges is that, you know, wecan solve problems here in New
Zealand, but if we get ourselvesnot aligned with the way the the
rest of the world operates and trades.
(08:41):
And we haven't actually solved the problem of just solved A
component because about 70% of what we've produced does still
get exported, particularly in the seeds market.
So we do, we are talking with a lot of overseas growers,
particularly in the last five years.
And we've found exactly what you've just said that you know
the the concerns and the challenges of the saying no
(09:01):
matter where you where you go inthe world.
And I think if we're going to solve this problem long term, we
don't necessarily just have to solve the New Zealand
challenges. We actually have to talk about
it at a global scale. And I think this Iranian war is
probably a very good opportunityfor that to happen because every
grower in the world is being affected right at this moment.
(09:25):
And so I think so hopefully, andI've asked some of the
multinational seed companies to start having that conversation
around their companies around the world because we actually
need those big companies to makethose changes and start driving
some of the changes that might need to happen.
And so, yeah, I think there's a real opportunity here at the
(09:46):
moment with the war. And no one likes to take
advantage of a war. But you know, the old saying
I've never let a good crisis go by probably stands really a good
sign for us at the moment, isn'tit?
We're right against the wall, but everyone is.
And you know, we've talked with the seed companies just in the
(10:07):
last couple of days and they're,they're right beside us because
if we're not making money, they're not making money.
You know, we have a pretty symbiotic relationship.
So, you know, what we're trying to do at the moment is at pull
the industry to give her and say, right, what does a new
model look like for arable New Zealand?
But at the same time, we also need to think globally and say
(10:27):
what does the new global arable model look like globally as
well. So pretty big, pretty big chunks
of work. But I do think that's the
logical way forward. And you know, if we don't get it
right, we don't even don't try, then we'll have more of the
same. And we know that that's not not
a viable option. No, look, that's that's pretty
(10:51):
aspirational and and I will comeback to that.
I'm going to close this out actually on that because I do
want to leave this on a positivenote, but it would be who me if
I didn't go a little bit more depressing before we got to the,
uh, the positive stuff. You've already mentioned the
Iran conflict a couple of times.We know that's going to have an
impact. It's already having a massive
(11:12):
impact on fuel prices and we know how dependent our arable
growers are on diesel. Our arable farms run on diesel.
You've got some pretty big machinery.
You got some big sprays, big tractors that have got to be
heating up and down paddocks. They don't run on hopes and
dreams. They run on fuel.
And what impact are we seeing from the Iran conflict happening
(11:34):
already on arable farms? Yeah, well, we're just finishing
off harvest now and and about toget a lot of the autumn crop in
the ground. So there is quite a demand of
fuel at the moment. Supply is is challenging.
You know, the government's saying there's plenty of supply,
but we're actually seeing some challenges.
But I think the key thing here is making sure that we have
(11:54):
communication between the farmerand the fuel supply use.
Agriculture is down as one of the critical industries.
So when we do get to higher levels of restrictions at the
moment we're at level 1 and and I think when it gets to Level 3
then it kicks in an agriculture is seen as a priority amongst
other critical services. So it's about communication and
(12:20):
leading companies know what yourdemand might look like going
forward. When are you going to need it?
And that applies both for fuel and also for fertiliser as well.
So we know that fertiliser is affected and both companies, the
main companies have said they'vegot supply available and supply
will be pretty good through until spring.
(12:43):
But the, the unknown there is what the price will be.
And but once again, I think it'smaking sure that people don't
panic. The product will be there and
but the challenge will be what will the price be.
Yeah. And I think that's certainly
the, the advice we were hearing within the states last week was
you know, short to medium term supply looks to be good.
(13:07):
It'll be that sort of that 18 months once we're through a
little bit of the once the, the the product that's been held up
at the moment or not coming through the Strait once that
should have been into the supplychain, that'll be where we might
see some, some restrictions on on products supply.
But you're the big unknown is just what's going to happen with
price gonna continue to go down that negative pathway.
(13:30):
And I do have to ask you about the the closures of waddies and
Mccains and and the the the lossof that frozen vegetable market
to to big chunks of New Zealand.There's got to be another big
kick in the guts to where arablefarmers.
Yes, it does. Where we're at in a woody scruff
of more than 50 years. Peas, beans, broccoli in the
(13:51):
past, carrots, I guess in Canterbury we're lucky that
we've still got tallies with andthey are based in Ashburton.
And so we're talking with them about how much they can take on
off that area. And they certainly wouldn't be
able to take it all on. But we're hoping that they may
(14:12):
do some more expansion at their site at Faison and pick up some
more area Hawkes Bay. I really feel for the, you know,
the, the reduction in options that the bodies and the, and the
McCain's closures have up there is going to hit them really
hard. And Canterbury, we, we have a
few more options, I guess to fill those gaps.
(14:35):
The Hawkes Bay does not have as many of those options, so
probably going to hit there evenharder than it will here in
Canterbury. But I guess it's a sign of the
times. Once again, it's about, you
know, product that can come intoNew Zealand easier.
And, and I think that what we'reseeing at the moment with these
closures and also across the arable industry is one of the
(14:58):
downsides of, you know, the government's done a really good
job around improving exports and, and then they want to
double exports and been doing that through free trade
agreements. But I think what they have
failed to understand is that quite often those free trade
agreements come at the impact ofdomestic companies.
And what we're seeing at the moment now is probably some of
(15:19):
those impacts. So I think there's a bit more
balance needs to go on there from governments, whoever's in
power, there's that, you know, making sure that they support
domestic as much as they supportthe export side.
We know exports hugely importantand particularly for
agriculture, but but yeah, we also need to make sure we have a
strong domestic economy, particularly in times like this
(15:43):
with the Iran war where we do get more isolated.
And it's and you know, we need to be more, have more security
around not only our food but also our energy as well.
So yeah, there's COVID tortoise there.
And now we've got a second hit. And I'd imagine in the future
we'll probably see a few more events which will put us in this
(16:03):
situation where we become a little bit more isolated,
particularly being down the bottom end of the world.
There's some benefits of being down.
Here some benefits. There's some disadvantages as
well and and that's one thing wesee in the airport industry when
we do export, it has got a lot more expensive to export to the
Northern hemisphere where a lot of our product was.
(16:24):
And you know, that's made us less competitive on the that
global market than some other producers.
So look, really do want to finish things out on a, on a bit
more of a positive note. So what can we, what can we do
to support, you know, we've got,we've got a wide variety of the
primary industries represented across New Zealand and in arable
(16:46):
as part of it. And that's one thing we do tend
to do reasonably well as an industry when we put our minds
and our hearts to something we can rally behind them.
What can we do to support arablegrowers here to keep them viable
and to keep them still contributing to to the New
Zealand primary industries? Yeah, I think there's two parts
here. 1, the international side of it, you know, there's still a
(17:08):
lot of upside there. You know, New Zealand, we, we,
there's only a few places in theSouthern Hemisphere that can
grow the types of crops we grow,the herbage seeds and vegetable
seeds. So that's still a very much a
positive. And we've seen growth in those
areas. And those areas, while the
herbage has been hit since COVIDwith excess supply, the
(17:29):
vegetable seed market has actually remained pretty stable
and has been growing over that period of time.
So there's upside there on the international markets
domestically. I I do think that when people
have opportunities to support New Zealand produce products,
you know, we should, I think quite often at the moment we
(17:49):
look at products and we go, well, I can import it for the
same price as New Zealand, but the import it's just easier for
me to do. They've gone down that track.
So I think supporting New Zealand growing products and
demanding demand for those products, New Zealand products
and quite often the quality is better as well.
So I think that's something thatNew Zealand can do.
(18:10):
You know, we have become a lot more reliant on imports and you
know, if I look at PK is probably a really good example,
we, I think they're talking 3,000,000 tonnes this year.
You know, we only produce 100, amillion tonnes of grain in
total. So in New Zealand, as if you
looked at New Zealand as a farm,we're actually becoming very
dependent on supplement feeds, essentially imported feeds and
(18:34):
in the country's position. And so that does put us in a bit
of a challenging position if we couldn't get those supplement
feeds into New Zealand and New Zealand have an animal welfare
issue resulting from that, that would have major trade impacts.
So, you know, I think we should be looking about how do we
support more local products which are available here in New
(18:55):
Zealand to protect us from thoserisks that could happen.
And so yeah, I put off and I do stop and look and pull back and
just look at New Zealand as a farm and how do we operate that
farm. And you quickly find that, yeah,
we are becoming increasingly dependent on those imports
coming in, all their supplement coming in.
(19:16):
So I think that's one area whereall parties need to think about
what is the strategy look like for for food security.
But, and quite often we talk about food security for humans,
but the biggest risk of food security I believe is actually
animals that would do more damage to New Zealand than a few
people getting angry. So yeah.
(19:38):
So I think, you know, we need tostart thinking about that as a
strategy for us going forward because it appears these events
likes to Arran war and COVID seem to be happening more often
and we'll probably see more in the future.
So that's an area I think we could all work on and and build
a bit more of a strategy around how do we build that resilience
(19:58):
and security into our farming systems.
No, I think that's certainly something I think you'd find
most, most New Zealand farmers could not get behind.
Just, you know, doesn't have to be everything, but trying to
make a conscious effort to support New Zealand growers
winner and when we can leaving alittle, some little changes mean
can make a huge difference. Yeah, exactly.
(20:22):
Yeah, we're not, we're not talking huge amounts here.
Like if, if there's 3,000,000 tonnes of palm kernel, even if
we did half a million tonne of extra grain sales would make a
huge difference to the arable industry.
And so yeah, you're right. It's it's not big shifts what we
need. So, yeah, I think it's that's an
area where can we probably need to sit down and work out a
(20:43):
little bit of a strategy around that.
Not sounds like a great idea andit sounds like you've got the
support anyway of the of the seed companies, which is a it's
a good first step as well. Anderson David, it's been great
catching up with you today and chewing the fan over this and
look as you develop that strategy for what we could do
(21:05):
for more New Zealand grain. Hey listen, we do you only too
keen to to chat to you again about.
Right. Thanks, Milton.
Jeez, thank you for joining the conversation with Blushed Diary.
We dropped new episodes each week, so be sure to hit the
subscribe button so you never miss an episode.
(21:25):
Until next time.
Welcome to Blue Shed Diary, a podcast about and four our
farmers and growers. I'm Milton Munroe, your host and
PSG brides and technical team manager.
The egg sector has been on a bitof an upswing recently and
confidence is certainly higher than it has been in years.
But there's one sector that is really still feeling the pinch
and that's New Zealand's arable farmers.
(00:33):
Some of the questions I want to answer to get answered today
are, you know, what's behind this struggle and why are some
looking to to leave the sector, looking for some perhaps greener
pastures. So joining the conversation
today to help me get some answers is Leiston Pharma and
Federated Farmers Arable Group Chair David Brickett.
Welcome to the show, David. Yeah.
Thanks Milton and and thanks forhaving us on.
(00:55):
No air pleasure. So arable farmers are having a
little bit of a tough time of itat the moment.
So can you just take us through what are the factors at play
here that are causing a bit of downturn in in the arable
industry? Yeah, I, I guess there's quite a
long back story to where we why we've, how we've got here
essentially. But I guess what's brought it to
a head is we've had now two seasons and are particularly in
(01:18):
Canterbury of Paul Harvest and in some areas in Canterbury have
three years now. And so you, we all know when we
have a poor weather conditions, you know, that puts a lot of
financial pressure on. But the story really probably
starts back 10 to 15 years ago. And over the last 10 to 15
years, we've was just seeing a gradual decline away in margins.
(01:42):
And, and we've also seen a shiftwhere previously we have had
some more exposure to our domestic economy and our
domestic economy has been able to deliver us some premiums over
global economies. But since COVID, we've we've
certainly seen a shift where we now live in the true global
economy. And you know, a lot of the
(02:03):
prices which we get are whateverthat commodity is, whether it's
grain or, or whatever the product is, the multiplications
of seeds, whatever that product has landed in New Zealand as the
price we get. And you know, five years ago
when the dairy industry was going well, we would probably
have seen maybe a $50 premium for New Zealand grains above
(02:26):
imported grains, but that their premiums gone now.
And we we do live in this globaleconomy.
So essentially the story is as the inflation has eroded, the
costs away and the margins haven't made-up for that.
And because we're on a global stage, we're competing against
countries that are a lot larger in scale.
(02:48):
So if we look at the grain, you know, we're competing against
Argentina and Australia where costs of production are
significantly lower, like we're talking 75% lower on some of
these areas. And they, a lot of those
countries also have some subsidisation as well.
So it's it's not not really level playing field, but that's
where we find ourselves operating.
(03:10):
And yeah, it's come to a head with the two wet harvests.
But now with the Iran war as well as we all know, we are
seeing fertiliser and fuel costsramping right up.
So that's probably brought it toa real head now where we are now
starting to discuss with the rest of the industry, the, the
scene companies, the flour millsand everyone, how do we get
(03:35):
through this? And how do we design A better
arable system to because what's worked for the last 40 years
doesn't appear to work in the current new world that we're, we
find ourselves in. So that's really we were, we
were at and we've, we've, I guess we've subsidised our
cropping industry with some livestock over the last few
(03:56):
years, while the livestock sector has been in a better
position. And that is probably masked some
of the, the downside of croppingindustry.
And that the returns on the livestock component in the
arable farm have allowed us to remain viable.
But yeah, not, not so much this this year, particularly with the
(04:19):
cost that we are going to see inthe spring.
We don't know what those costs are going to be like, but we
know they're probably, they're certainly going to go one way.
You paint a pretty a bleak picture there of our arable
industry, which is a that's a real shame.
It's certainly been a been a bitof a powerhouse for New Zealand
for a number of years. You've already mentioned
(04:40):
diversification. You know, grain farmers actually
bring in more animal and animalsand we've seen a lot of them
doing things like winter grazingor even actually setting up
their own small mobs and, and trying to capitalise on beef
markets and anything they can. Is that diversification helping?
Yes, it does. I think you need diversification
(05:01):
across any farming business is agood is a good thing.
And I guess arable farmers have always had a lot of
diversification because particularly in Canterbury we
grow a lot of different crops. So you know, we grow about 10
different crops on the farm. So that gives us diversification
within the cropping. But the problem we've got at the
moment is all of those crops have low margins or
(05:23):
profitability. So you need to look beyond the
cropping side of it and that's where the livestock comes in.
And obviously the livestock's returning well and a lot of
arable farmers last year did well because we were able to buy
store stock at lower prices and we got the gain off the market,
whereas this year slightly different and that we are paying
(05:45):
the market price. So, you know, there were
probably $80 a hit ahead of whatwe're paying for store lambs
this year, and that's certainly a good way to drain the bank
account. Yeah, no, I can certainly
imagine. Are we seeing some arable
farmers actually leaving the industry, actually making the
the switch and heading into something like dairy?
(06:07):
Yeah. It depends where you are on the
country and what the regulationsand rules of your Regional
Council are. In Canterbury, we've seen some
of those rules become less stringent and we have seen a
number of people move over to dairy.
So I think last year there was about 15 conversions.
Some, a lot of those are arable,but some will be from dairy dry
(06:30):
stock farms. This year.
We're seeing a significant number again of I've heard of
about 30 so far and they are some of our better farmers and
some of our better farms. So previously in the 2000s when
we had a very boom, it was more of the marginal ground that went
to dairy. This time round we're actually
(06:51):
seeing some of the the better ground go and the, and the
skills of those farmers we lose as well.
So that's one of the concerns wehave is that, you know, we lose
the the the ground that's best for arable, but also the skills
that go with it. So, so yeah, we will see the
number go to dairy, but we'll also see a number and increase
the component of livestock. So you know, an arable farm may
(07:13):
have teen percent livestock as part of their income and 90%
normally with the crops. Yeah, we could see that swing to
closer to a 5050 and and we can do that quite easily, but we do
have to bring their capital stock on and buy that in.
So that's another challenge, butit's certainly a cheaper
challenge than doing a dairy conversion at the moment where
(07:35):
we're seeing some numbers of around 30,000 hectare just to do
a full conversion from an arablefarm.
So that's significant investmentthat's being made there.
And, and once you've made that investment, those farmers won't
won't be going back anytime soon.
No, they won't be, that's for sure.
Um, slight change of tact here. You know, we're talking at the
(07:58):
min number of pressures that arecoming onto our arable growers
in New Zealand, but it's not just a New Zealand problem too,
is it? Open up some of the, the global
farming literature that's out there and you're hearing the
same issues coming from growers and the places like the UK.
I was in the the States for a couple of conferences last week
talking to some of the large arable growers there.
(08:20):
Exact same issues, maybe some slight variations, but globally
the arable market is not is isn't looking good.
Yeah. And that is one of the
challenges is that, you know, wecan solve problems here in New
Zealand, but if we get ourselvesnot aligned with the way the the
rest of the world operates and trades.
(08:41):
And we haven't actually solved the problem of just solved A
component because about 70% of what we've produced does still
get exported, particularly in the seeds market.
So we do, we are talking with a lot of overseas growers,
particularly in the last five years.
And we've found exactly what you've just said that you know
the the concerns and the challenges of the saying no
(09:01):
matter where you where you go inthe world.
And I think if we're going to solve this problem long term, we
don't necessarily just have to solve the New Zealand
challenges. We actually have to talk about
it at a global scale. And I think this Iranian war is
probably a very good opportunityfor that to happen because every
grower in the world is being affected right at this moment.
(09:25):
And so I think so hopefully, andI've asked some of the
multinational seed companies to start having that conversation
around their companies around the world because we actually
need those big companies to makethose changes and start driving
some of the changes that might need to happen.
And so, yeah, I think there's a real opportunity here at the
(09:46):
moment with the war. And no one likes to take
advantage of a war. But you know, the old saying
I've never let a good crisis go by probably stands really a good
sign for us at the moment, isn'tit?
We're right against the wall, but everyone is.
And you know, we've talked with the seed companies just in the
(10:07):
last couple of days and they're,they're right beside us because
if we're not making money, they're not making money.
You know, we have a pretty symbiotic relationship.
So, you know, what we're trying to do at the moment is at pull
the industry to give her and say, right, what does a new
model look like for arable New Zealand?
But at the same time, we also need to think globally and say
(10:27):
what does the new global arable model look like globally as
well. So pretty big, pretty big chunks
of work. But I do think that's the
logical way forward. And you know, if we don't get it
right, we don't even don't try, then we'll have more of the
same. And we know that that's not not
a viable option. No, look, that's that's pretty
(10:51):
aspirational and and I will comeback to that.
I'm going to close this out actually on that because I do
want to leave this on a positivenote, but it would be who me if
I didn't go a little bit more depressing before we got to the,
uh, the positive stuff. You've already mentioned the
Iran conflict a couple of times.We know that's going to have an
impact. It's already having a massive
(11:12):
impact on fuel prices and we know how dependent our arable
growers are on diesel. Our arable farms run on diesel.
You've got some pretty big machinery.
You got some big sprays, big tractors that have got to be
heating up and down paddocks. They don't run on hopes and
dreams. They run on fuel.
And what impact are we seeing from the Iran conflict happening
(11:34):
already on arable farms? Yeah, well, we're just finishing
off harvest now and and about toget a lot of the autumn crop in
the ground. So there is quite a demand of
fuel at the moment. Supply is is challenging.
You know, the government's saying there's plenty of supply,
but we're actually seeing some challenges.
But I think the key thing here is making sure that we have
(11:54):
communication between the farmerand the fuel supply use.
Agriculture is down as one of the critical industries.
So when we do get to higher levels of restrictions at the
moment we're at level 1 and and I think when it gets to Level 3
then it kicks in an agriculture is seen as a priority amongst
other critical services. So it's about communication and
(12:20):
leading companies know what yourdemand might look like going
forward. When are you going to need it?
And that applies both for fuel and also for fertiliser as well.
So we know that fertiliser is affected and both companies, the
main companies have said they'vegot supply available and supply
will be pretty good through until spring.
(12:43):
But the, the unknown there is what the price will be.
And but once again, I think it'smaking sure that people don't
panic. The product will be there and
but the challenge will be what will the price be.
Yeah. And I think that's certainly
the, the advice we were hearing within the states last week was
you know, short to medium term supply looks to be good.
(13:07):
It'll be that sort of that 18 months once we're through a
little bit of the once the, the the product that's been held up
at the moment or not coming through the Strait once that
should have been into the supplychain, that'll be where we might
see some, some restrictions on on products supply.
But you're the big unknown is just what's going to happen with
price gonna continue to go down that negative pathway.
(13:30):
And I do have to ask you about the the closures of waddies and
Mccains and and the the the lossof that frozen vegetable market
to to big chunks of New Zealand.There's got to be another big
kick in the guts to where arablefarmers.
Yes, it does. Where we're at in a woody scruff
of more than 50 years. Peas, beans, broccoli in the
(13:51):
past, carrots, I guess in Canterbury we're lucky that
we've still got tallies with andthey are based in Ashburton.
And so we're talking with them about how much they can take on
off that area. And they certainly wouldn't be
able to take it all on. But we're hoping that they may
(14:12):
do some more expansion at their site at Faison and pick up some
more area Hawkes Bay. I really feel for the, you know,
the, the reduction in options that the bodies and the, and the
McCain's closures have up there is going to hit them really
hard. And Canterbury, we, we have a
few more options, I guess to fill those gaps.
(14:35):
The Hawkes Bay does not have as many of those options, so
probably going to hit there evenharder than it will here in
Canterbury. But I guess it's a sign of the
times. Once again, it's about, you
know, product that can come intoNew Zealand easier.
And, and I think that what we'reseeing at the moment with these
closures and also across the arable industry is one of the
(14:58):
downsides of, you know, the government's done a really good
job around improving exports and, and then they want to
double exports and been doing that through free trade
agreements. But I think what they have
failed to understand is that quite often those free trade
agreements come at the impact ofdomestic companies.
And what we're seeing at the moment now is probably some of
(15:19):
those impacts. So I think there's a bit more
balance needs to go on there from governments, whoever's in
power, there's that, you know, making sure that they support
domestic as much as they supportthe export side.
We know exports hugely importantand particularly for
agriculture, but but yeah, we also need to make sure we have a
strong domestic economy, particularly in times like this
(15:43):
with the Iran war where we do get more isolated.
And it's and you know, we need to be more, have more security
around not only our food but also our energy as well.
So yeah, there's COVID tortoise there.
And now we've got a second hit. And I'd imagine in the future
we'll probably see a few more events which will put us in this
(16:03):
situation where we become a little bit more isolated,
particularly being down the bottom end of the world.
There's some benefits of being down.
Here some benefits. There's some disadvantages as
well and and that's one thing wesee in the airport industry when
we do export, it has got a lot more expensive to export to the
Northern hemisphere where a lot of our product was.
(16:24):
And you know, that's made us less competitive on the that
global market than some other producers.
So look, really do want to finish things out on a, on a bit
more of a positive note. So what can we, what can we do
to support, you know, we've got,we've got a wide variety of the
primary industries represented across New Zealand and in arable
(16:46):
as part of it. And that's one thing we do tend
to do reasonably well as an industry when we put our minds
and our hearts to something we can rally behind them.
What can we do to support arablegrowers here to keep them viable
and to keep them still contributing to to the New
Zealand primary industries? Yeah, I think there's two parts
here. 1, the international side of it, you know, there's still a
(17:08):
lot of upside there. You know, New Zealand, we, we,
there's only a few places in theSouthern Hemisphere that can
grow the types of crops we grow,the herbage seeds and vegetable
seeds. So that's still a very much a
positive. And we've seen growth in those
areas. And those areas, while the
herbage has been hit since COVIDwith excess supply, the
(17:29):
vegetable seed market has actually remained pretty stable
and has been growing over that period of time.
So there's upside there on the international markets
domestically. I I do think that when people
have opportunities to support New Zealand produce products,
you know, we should, I think quite often at the moment we
(17:49):
look at products and we go, well, I can import it for the
same price as New Zealand, but the import it's just easier for
me to do. They've gone down that track.
So I think supporting New Zealand growing products and
demanding demand for those products, New Zealand products
and quite often the quality is better as well.
So I think that's something thatNew Zealand can do.
(18:10):
You know, we have become a lot more reliant on imports and you
know, if I look at PK is probably a really good example,
we, I think they're talking 3,000,000 tonnes this year.
You know, we only produce 100, amillion tonnes of grain in
total. So in New Zealand, as if you
looked at New Zealand as a farm,we're actually becoming very
dependent on supplement feeds, essentially imported feeds and
(18:34):
in the country's position. And so that does put us in a bit
of a challenging position if we couldn't get those supplement
feeds into New Zealand and New Zealand have an animal welfare
issue resulting from that, that would have major trade impacts.
So, you know, I think we should be looking about how do we
support more local products which are available here in New
(18:55):
Zealand to protect us from thoserisks that could happen.
And so yeah, I put off and I do stop and look and pull back and
just look at New Zealand as a farm and how do we operate that
farm. And you quickly find that, yeah,
we are becoming increasingly dependent on those imports
coming in, all their supplement coming in.
(19:16):
So I think that's one area whereall parties need to think about
what is the strategy look like for for food security.
But, and quite often we talk about food security for humans,
but the biggest risk of food security I believe is actually
animals that would do more damage to New Zealand than a few
people getting angry. So yeah.
(19:38):
So I think, you know, we need tostart thinking about that as a
strategy for us going forward because it appears these events
likes to Arran war and COVID seem to be happening more often
and we'll probably see more in the future.
So that's an area I think we could all work on and and build
a bit more of a strategy around how do we build that resilience
(19:58):
and security into our farming systems.
No, I think that's certainly something I think you'd find
most, most New Zealand farmers could not get behind.
Just, you know, doesn't have to be everything, but trying to
make a conscious effort to support New Zealand growers
winner and when we can leaving alittle, some little changes mean
can make a huge difference. Yeah, exactly.
(20:22):
Yeah, we're not, we're not talking huge amounts here.
Like if, if there's 3,000,000 tonnes of palm kernel, even if
we did half a million tonne of extra grain sales would make a
huge difference to the arable industry.
And so yeah, you're right. It's it's not big shifts what we
need. So, yeah, I think it's that's an
area where can we probably need to sit down and work out a
(20:43):
little bit of a strategy around that.
Not sounds like a great idea andit sounds like you've got the
support anyway of the of the seed companies, which is a it's
a good first step as well. Anderson David, it's been great
catching up with you today and chewing the fan over this and
look as you develop that strategy for what we could do
(21:05):
for more New Zealand grain. Hey listen, we do you only too
keen to to chat to you again about.
Right. Thanks, Milton.
Jeez, thank you for joining the conversation with Blushed Diary.
We dropped new episodes each week, so be sure to hit the
subscribe button so you never miss an episode.
(21:25):
Until next time.
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