June 3, 2024 • 30 mins
In this episode, Lower North Island Regional Manager Mark Burke shares insight on the maize grain market opportunities and considerations. Mark delves into the pressures of regional demands, maize contracts, and pricing tactics and how these factors converge to shape the current grain market. The team discusses the methods growers use to ensure profitable sales, highlighting the significance of careful planning, especially after the recent surge in grain prices. With a focus on the challenges presented by weather and expenses, this episode covers the intricacies between supply and demand and how to best navigate the market and make informed decisions for next season.
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Episode Transcript
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Speaker 1 (00:04):
G'day and welcome to Feed for Thought, a regular
podcast from Pioneer coveringeverything from farm systems to
crops and products and much,much more.
Speaker 2 (00:15):
Welcome back to Feed for Thought.
My name's Matt Daly and todaywe've got sidekick back Wade
Bell or I'm back in the seatYou're back.
Yeah, you've been running amokwithout me, mate.
Speaker 1 (00:27):
Well, I think the episodes have been going pretty
smoothly.
In your absence, mate, Iwouldn't be throwing stones at
this point.
Number one listener my motherdoesn't agree with that.
Speaker 2 (00:37):
Anyhow, we've got another guest with us as well
and it's nice to be interviewinghim, because about 10 years ago
he interviewed me for a jobwith Pioneer.
So him, because about 10 yearsago he interviewed me for a job
with Pioneer, so today we'rewelcoming.
Speaker 1 (00:48):
Mark Burke, Regional Manager.
Speaker 3 (00:49):
Was it a good hire Burke?
Speaker 2 (00:50):
Desperation.
I was going to say we'rerecording here.
Speaker 3 (00:53):
No no, it was a good hire.
Yes, it took a while to findthe right person, but yeah, it
was all canned in the days ofChristmas.
Speaker 2 (01:03):
They were under time pressure, basically.
Speaker 3 (01:05):
Yeah, yeah yeah, anyhow.
Speaker 2 (01:06):
so welcome, berkey, to the podcast, and today we're
going to lean on a bit of yourexperience from what you've seen
out of the markets and whatwe're seeing in the maize grain
market in particular for thisseason, because, it's fair to
say, it's been a challenging onefor a lot of people involved,
and so we want to hear a littlebit from yourself and what
you've seen in your region andwhat you understand from the
(01:28):
wider.
But we talked about you hiring,but you've done some other,
better things in your careerwith Pioneer.
You've been with us a while.
Can you tell us a little bitabout yourself?
Speaker 3 (01:36):
Yeah, so I started with Pioneer nearly 24 years ago
.
I was employed as the areamanager for the South Island.
That was pretty much fromPicton to Bluff.
I was a fresh 25-year-old.
It was probably my second job.
I think it was at a universityand I'd been in a sales role
prior.
Yeah, and I always looked up toPioneer, thinking it's a good
(01:57):
product, good company it'd bequite good to be a part of.
And then, when the role camearound, I was very successful
and here I am really.
The rest is history.
Speaker 2 (02:06):
Surely you've done more in 24 years.
Speaker 1 (02:10):
How big was the maize market in those days in the
South Island?
Speaker 3 (02:14):
It was a pretty exciting one at the moment, but
quite small at the time.
But there were some good keyloyal growers and the dairy
industry was sort of just takenoff, and at that time there was,
you know, it's a handful, butthere was a lot more grass
available and so you, generallythe farmers that were using
maize silage, were using it, fora reason.
Obviously you go back 23 yearsnow, um, and look down south and
(02:38):
now there's probably more dairyfarmers than there is farmers
selling grass silage, and somaize has become a huge part,
because you know.
Hectare of land 25 tonnes,thanks for coming.
Hectare of grass, you knowthree tonnes Could be 80 me if
it's just, you know, surplusfeed on a shoot farm, or could
be, you know, 12 me if it's asurplus grassy crop.
(02:59):
Take off, you know, inSeptember, october.
Speaker 2 (03:01):
Should we put them back down south, because you're
not down there anymore?
No, no, no so 2005 or 2006,.
Speaker 3 (03:07):
I moved back to the Lower North Island where I spent
my university days at, and hereI am really yeah.
Speaker 2 (03:16):
So now your role is the regional manager for the
Lower North Island.
Speaker 3 (03:20):
So I started off as the area manager for Lowland
North Island and then, as thecompany grew and we had to make
some staff, I guess, positions,I became the regional manager.
My regional manager role waseffectively from Gisborne to the
bottom of the Warapu, shootacross the hill to the Horofunua
or Kapiti Horofunua and thencome up to basically Kimbolton
(03:42):
is the furthest maize crop wehave really.
And then, yeah, the regionalalso includes up to Wanganui,
but my colleague Dave McDonaldpretty much looks after the
Rangitiki.
Speaker 1 (03:52):
And what's the mix there with the maize market?
So obviously, gisborne, we knowit's obviously heavy kind of
grain, hastings.
Speaker 3 (04:00):
North is pretty much 90-95% grain.
Yep, as you know, very littledairy farms in that area, which
is a good and a bad thing.
And then Central Hawke's Bay ispredominantly silage, a little
bit of grain.
Then Tararua is all silage.
Warapa is a good chunk of grainin the lower end of the Warapa
(04:21):
and then silage around sort ofcentral to northern Warapa.
Come over to the Manawatu andit's probably I don't know 50-50
grain to silage, Probably moresilage in the Manawatu than
grain.
The Rangitiki is very similarto Gisborne really.
Well somewhere in between.
It's probably 70-30% grain tosilage probably.
Speaker 2 (04:40):
I'd guess, have those regions changed over the years
In terms of their Maize usage?
Speaker 3 (04:46):
Yeah, I guess.
If you looked At CentralHawke's Bay, yes, we're now
growing Quite a large area Ofgrain In Central Hawke's Bay,
warapa.
Huge increase In maize grainGrown area In that area, which
is all Trucked out, of course, abit like Gisborne.
It's all trucked back to themarket, which is for gizmon,
it's a waikato, or struck intothe manual too, which is huge
freight bill um warapa.
(05:08):
There's a lot of dry land inthere so maize isn't suitable,
so a lot of barley and cerealsare growing, which which gets
fed into the deer industry.
So maize grain usage in thatarea is small sort of oily, but
it gets trucked out to themarketers.
Manual too is pretty much smackbang in the market is In the
thick of it In the thick of itIn the Rangitiki.
well, some of it goes toTaranaki, to the dairy market,
(05:30):
some of it goes back to theManawatu and then goes to all
sorts of places.
Speaker 2 (05:33):
Yeah, yeah.
And so the maize grain side ofthings.
How has that kind of in yourtime, probably in the LNI, how
has that changed in terms ofusage?
Speaker 3 (05:45):
Yeah.
So if you looked at usage, Iguess historically the dairy
demand was probably quite smalland a lot of it went into pig
and poultry Over the lastprobably 15, 20 years.
You drive around thecountryside and you see cow
sheds with silos, you see augers, you see auger trucks on the
roads and you talk to dairyfarmers.
(06:07):
Anyone that's bought a cow shedin the last 15 years a
reasonable cow shed is probablyput some capital aside to put in
a silo in-shed feedingmass-driven demand.
So a lot of the grain now isused in the dairy industry.
I think the numbers, if I'mcorrect, is probably somewhere
between 78% of our maize grainwe grow is used in the dairy
industry.
I think the numbers, if I'mcorrect, is probably somewhere
between 7% and 8% of our maizegrain we grow is used in the
(06:27):
dairy industry.
Whether that's in pellets or inkibble or whether that's in
calf meal, it's still in thedairy industry as such.
So huge, huge increase in usage.
I mean a lot of dairy farmerswill either do blends of grain,
grain and other feeds.
Um, they'll use if they'reusing reasonably large dairy
(06:48):
farmer they would put a, youknow, 100 ton silo in with a
crusher, whether it be hammermill or disc mill or kibler or
some sort of form.
They'll be buying the, thecommodity grain and then
crushing and feeding it intothis and shed.
And you know, some guys addminerals to that, some guys, um,
have another silo for a mineralsilo.
It's all sorts of stuff really.
It's probably come on from.
(07:09):
You know, look down inCanterbury and South Island.
Those guys down there bought,you know, conversions, bought
cow shears, put in grain, cheapgrain, and then well, they can
make a margin on that.
Well, they could, they can.
So the North Island guys didthe same pretty much.
You'd have to say, though, perky, a lot of the North Island
probably was driven by the rapidexpansion of the palm kernel
(07:31):
market you know, reallysignificant yeah, and I mean if
you looked at how was palmkernel fed in the early days I
reckon normally fiberglass,those troughs that they made.
They probably distributedthousands of them around the
countryside, fed them inpaddocks.
You pull the trough out of thepaddock.
What do you see?
Big moon, pretty much where thegreen grass is and the dirt
around it and that probablytransitioned from wastage and
(07:55):
lack of grass growing into well,we can feed this in shed.
Press a button.
Cows are on a rotary for eight,seven, eight minutes.
How much can we eat in thattime?
Perfect, a couple of kilos.
Hey, it all helps.
Speaker 1 (08:02):
Yeah.
Speaker 3 (08:02):
And it was reasonably cheap, yeah.
Speaker 2 (08:04):
Yeah, and so we've gone through that kind of
expansion into using more intodairy systems, and obviously a
lot of our maize grain in NewZealand is going into that and
we've probably got a highproportion coming into the
country as well.
Speaker 3 (08:18):
Yes, we do.
Speaker 2 (08:18):
And, as I alluded to at the start, we've got this
swell of maize grain this season.
Speaker 3 (08:24):
We do.
How has?
Speaker 2 (08:26):
that kind of played out at this stage.
Speaker 3 (08:28):
So I guess, if you step back a little bit, go back
to the spring, in terms of thepicture, there was the dairy
price or the dairy payout backin June last year was looking
positive.
Gabrielle had come through andthe perception was that grain
was going to be short.
Let's be honest, a lot of grainis grown in Gisborne and
(08:49):
Hawke's Bay.
They got hammered by Gabriel.
That probably put some skieramongst the market in terms of
geez.
How much grain are we going tohave?
Dairy farmers were using a bitof feed in that season, but not
a lot because, as you know, whenit rains the grass grows and
(09:11):
season, but not a lot because,as you know, when it rains the
grass grows.
And then come into this springof fy 24, of course, you know.
You look at the silage bunkersthey're all full, whether it be
may silage or grass silage.
So payouts not bad.
So farmers go well.
Actually, costs are lookingtight, inflation come up, so
they go.
Well.
We actually we don't need tocontract as much fee, whether it
be grass or maize or maizegrain or whatever.
And that's probably wasn'treally seen until probably
around Christmas time and, ofcourse, if you remember, back in
(09:32):
September or August, somewherearound there I think it was
payout took a huge dive Augustand you know, farmers did their
cash flows and went geez, it'salways seen as red ink.
Someone's got to go, you know,and when maize grain had a six
or seven on front of it, shegets a bit tight to make a
margin.
Then you go well.
Actually, how can we get awaywith less?
(09:53):
Yeah, and then having less, yougo well.
Actually, if you might havebought two, three, four in a ton
, if you're hard at this two ina ton, and if 10 farmers hard
two in a tonne, and if 10farmers have turned a tonne, all
of a sudden you've got 2,000tonnes.
So it doesn't take long for afew farmers to say, oh, actually
we don't need to feed as much,we can't afford to feed as much.
Then crop.
Speaker 2 (10:10):
So it was almost a double whammy.
We had more go on theexpectation out of Hawke's Bay.
Speaker 3 (10:18):
I wouldn't say more went in, matt.
I would say actually, becauseit was so wet in Hawke's Bay and
Gisborne, less went in.
Ah yeah, less maize grain wentin in those areas.
Yeah, probably about the samein everywhere else in terms of
the Warapa, manitou, rangitiki,but definitely a lot less in the
Gisborne East Coast.
Speaker 2 (10:37):
Yeah, right, but then we didn't use that grain from
last season in that peak periodthat we traditionally use it in
dairy systems.
Speaker 3 (10:45):
And I mean most dairy , if not most.
Some dairy farmers contracttheir grain for the year and
some dairy farmers pay thatspace.
Well, geez, if I need it I'llbuy it.
And so if you're a grain dealeror if you're a grain trader and
grain becomes part of your feedsupply and you sell that to
whoever wants to buy it, and allof a sudden you have to buy
(11:08):
that grain and contract it inand think, yep, I'll sell 10,000
tonnes over that period and youonly sell five.
Well, you've got 5,000 tonnessitting in a silo somewhere.
It's taking up space.
Then you've got this year'scrop going in.
You haven't sold the lastyear's 5,000.
What happens?
You've got oversupply, supplyand demand.
Those who did well third formor fourth form economics would
(11:30):
know supply and demand meanslowering price If they passed it
.
Yeah if they passed it.
Some of us did, some of usdidn't, but let's not talk about
that.
So yeah, oversupply here now,with a lower grain price,
struggling to sell.
I guess we had a weak demand, Isuppose.
Speaker 1 (11:50):
We are moving this year's grain, but it's a far
sale.
So it feels, Berky, like fromeverything you've just said
there, that it's a little bit ofa buyer's market for perhaps
for the foreseeable future, forthe short term at least.
Speaker 3 (12:00):
Yeah, I mean, yeah, I guess we are moving it.
The contracts last year wereout and about and, because you
know, think about it.
You put yourself in a grower's,in a cropping farmer's point of
view.
You always want more, you knowif you're selling lambs to the
works, you always want more.
If you're selling bulls to thefreezing works, you always want
the best.
You go to sale yards you putyour hands up.
(12:21):
Always someone wants to paymore, and so you get to.
You know the contracts on thetable.
You know, last year you soldyour grain for $600.
This year it's $500.
If you could get a contract, ohno, you can pay more than that.
And so some guys say, well, atthe end of the day I'm in the
business I sign every year,let's stay, stick to the plan.
Good, they weren't too badlyaffected, those that went.
(12:43):
Well, actually, I think theprice, I can see some future.
Speaker 1 (12:48):
I can see some upside .
Speaker 3 (12:50):
No, I'm going to sit.
And if you looked at the lastcouple of years, there's been
very little difference betweenspring and autumn pricing.
In fact, last year there was ahuge increase in the autumn
pricing of maize grain.
This year it's the opposite andit's like anything you just have
to ride it out or you have togo.
Well, actually, my business cansustain a bit of risk or no.
My business can't sustain a bitof risk and contracts I'll
(13:12):
contract in, I'm in, I'll takesome cover and you're fine
because you've got some cover,you've generally got some
storage space, you've got thedryer booked in and it's
actually easy.
Yes, you might not make as muchas you could do, but you also
might not lose as much as youcould do either, and so do guys,
do anything.
Speaker 2 (13:28):
I don't want options, some outs.
Speaker 3 (13:31):
Yeah, so where we've got a dairy market, in reality,
years from Taranaki, manitoba toHawke's Bay has now got very,
very dry.
Even now it's still very dry.
Even though we're in May nowit's still very, very dry.
We got quite dry there in Marchand April and luckily the dairy
boys go.
Actually, we still need to feedour cows, we need to make sure
(13:52):
we don't affect next year'sproduction, and so we actually
sold a lot of maize silage tothe dairy industry, which did
two things it gave them somefeed so they didn't affect next
year.
It got them through the end ofthis year and we've still got
very low covers on farms.
So we've also put some maizesilage into the beef market and
(14:13):
it's cleaned up a whole lot ofmaize that was potentially going
to go in for storage and takeup even more space and become a
bit of a cluster to.
Actually we might be able toget through this.
The biggest concern areas areis the Wairarapa and the worst
is actually the GisborneWairarapa area, because you've
got limited.
Speaker 2 (14:31):
You don't have the market.
Speaker 3 (14:32):
You don't have the market, you don't have the
market, limited infrastructureand it's all going to be trucked
out.
I mean, hey, there's not muchchange in $100 a tonne freight
and when you've got a soft maizegrain price.
My heart goes out to those guys.
They're going to find it veryhard.
But look across allagricultural industries, very,
very few will be making moneythis year.
(14:52):
So it's just, you're all in thesame boat together, really.
Speaker 2 (14:55):
So if people aren't making a dollar.
But Wade's just said it's abuyer's market before.
Speaker 1 (15:02):
Well, I'm just reading, I'm just interpreting
what he's saying here.
I hate to put words in people'smouth.
I was putting words in hismouth, it was well played at the
time.
Speaker 2 (15:11):
What are the opportunities?
Speaker 3 (15:12):
I suppose so the opportunities, if you are.
Well, let's be honest, dairyfarmers are basically now the
main usage of where this maizegrain could go or might go.
Some of the chicken and thepoultry market is out there and
they're coming in to clean upsome of the surplus, which is
fine.
But at the end of the day, itis good buying from a dairy
(15:34):
farmer's point of view, and ifyou're a dairy farmer that's got
a silo that's probably gettingempty, and if you kibble your
own, you can definitely enterthe market now and buy some
surplus maize grain, which willbe two things Great for your
farm system.
You'll get it at a reasonableprice compared to last spring
and you can actually help thegrain industry out as well.
Speaker 2 (15:57):
You don't have to tell us your buying strategies
at home, but you guys use maizegrain on your home dairy farm in
the Taranaki.
Yeah, how do you guys go aboutusing that.
Speaker 3 (16:07):
Yeah, so my brother, cameron, runs the home dairy
farm.
He's an invested owner manager,call him what you like.
We bought a new cowshoe in 2008and, of course, at that time,
what's the next thing you do?
Put a silo in.
Speaker 1 (16:20):
Or a feed pad.
Or a feed pad yep, and we go.
Speaker 3 (16:22):
well, actually silo's cheaper at the time.
So we go, well, we'll just tickthe box and put that in as well.
We also tick the box on ahammer mill and so we can then
play the commodity grains space.
And so hammer mill, and so wecan then play the commodity
grains space.
And so one of the drivingfactors towards us was well, we
wanted to feed grain in the shed, you know, cows in the platform
, for seven, eight minutes theycan eat between, well, half a
(16:45):
kilo and three or four kilos,depending on time of the year.
If you slow it, slow it down,and our objective was to my at
the time, grains were reasonably, reasonably good buying and
empty rate was probably 14% to15%.
We go well, how do we get thatdown?
So we go, well, we'll put somegrain in feed in the spring.
First 12 months empty rate wasdown about 9%, 8%, 9%, which was
(17:07):
fantastic, and grain was goodbuying.
We crushed our own.
So we played the commodityspace and ever since then we've
pretty much yeah, stick to ourrules, which we play the
commodity space and ever sincethen we've pretty much, yeah,
stick to our rules, which arecontract in the spring Every
year.
our preference, our cameraman'spreference, is maize grain.
He has used barley, at times hehas used other things as well,
but preference is maize grain.
Why maize grain?
Speaker 1 (17:30):
And it's not because I work for Pioneer.
We're putting silage in.
This is what the listeners aregoing to be thinking.
This is what the listeners aregoing to be thinking yeah, yeah,
yeah.
Speaker 3 (17:35):
I have no input on what he puts through the cashier
.
I let him run that I don't getinvolved.
He does what he likes.
We talk about it over Christmastable, over family dinners, but
day to day running and bigpicture stuff, it's him.
We just have some discussions.
I want to make sure I keep aseat at the Christmas table,
matt it's a good lunch or a gooddinner.
I don't want to get kicked offthe island, so to speak.
(17:55):
And so he contracts.
Every year we use three and aton, half a ton of cow maize
grain, and we feed it prettymuch from calving right through
to around about Christmas whenwe finish mating.
And then if there's anythingleft over, well, we feed that
through for half a kilo a day.
Or we go to the market marketjust buy a cheap commodity
product, the reason being youeither press the button on the
(18:16):
backing gate or just put in halfa kilo a day.
You know, give them a taste,get them on the platform yeah
staff.
Um, I love pressing a button,but of course you're down in the
rotary, you can't see the backof the yard, so it's just easy
for him to get the cows in theyard and so it works well so
even, even management things.
Speaker 2 (18:33):
So we've got stuff like lifting peak production and
whatnot and reducing empty rate, but even just little things
like management.
Speaker 3 (18:39):
Yeah, it helps.
Speaker 1 (18:41):
So it's incredibly complementary in the spring
right?
So I'll give you all of that.
The devil's advocate part of mesays and I'll come back to
something that you mentionedearlier is that the price
variability in it can sort ofmake it marginal at times.
There can be good margins someseasons not.
So, using your crystal ballyou've given us the commentary
(19:03):
about the grain market In termsof what you guys are thinking,
maybe in relation to your owndairy farm.
Are you seeing it as anopportunity where you'll say yep
in the spring?
Absolutely this year?
It's a goer from what we cansee.
Speaker 3 (19:19):
So I guess, if I wind back the clock to well.
Cameron normally makes hisdecision around feed and stuff
in terms of grains aroundSeptember, just as carving sort
of finishes or winds down and hegoes.
Well pay it was low If youthink about back in spring 2022,
he purchased his contract forthe 23 spring and that would
(19:42):
have had a six in front of itand at a $6 or $7 odd payout
there's not a lot of margin init and so he goes.
Well, I can't afford tocontinue to feed maize grain at
that price at this payout.
We'll suck it up this year, butthere's no way I'm signing a
contract that's got a six in itor even a five in it.
There are other turnovers feesI can use in the spring.
(20:03):
It won't be as good, but I'vegot to keep the business ticking
over.
And so he made the decision lastspring to sit on his hands.
He kept talking to his graincompany what's the price of all
the contracts?
No, no, I'm not signing.
And then come February he goesright, I've got something done.
And he goes well, no, it'sstill too dear.
(20:23):
And then I haven't spoken tohim for a while, but I'm pretty
sure he signed up some maizegrain just recently.
So you know, yes, when wesigned up in spring 22, we paid
a bit of money.
But this year we'll actually beokay, average that out,
providing cash flow it's not toobad, but it is a part of our
(20:44):
system.
Speaker 2 (20:44):
Yeah, and going forward it will be as well.
Speaker 3 (20:48):
We're probably like, if you think about it, at a $600
grain price, there will be manydairy farmers that are buying
grain as a commodity, crushingthemselves, feeding in a shed.
Thinking exactly the same.
Yeah, and that probably hasn'thelped the situation we're in.
Yeah, correct, yeah.
Speaker 1 (21:05):
Yeah, incredibly complementary to the system.
You know peak milk fed in thespring.
You know all the attributes ofmaize grain fed over that period
are perfect and the stars looklike they're aligning.
A little bit from a dairyfarmer's point of view at the
very least that the economicside of it looking a little more
favourable too.
Speaker 3 (21:23):
You definitely are.
I mean this year, providing thepayout stays where it is, will
be a reasonable year.
You think, you hope, but one ofthe key benefits.
We've tried barley.
He prefers maize grain.
It's slower digestion.
He says it's 14 ME, but I'm notarguing with him when he says
it's 14, it's probably closer to13.5 or 13.8, but hey, I'll
(21:44):
take his 14 any day.
He also adds minerals to it andthen to get the cows eating it
in the spring he finds that theyare slow to get used to it
after calving, even thoughthey've eaten it all year.
They have 6-8 weeks off, comeback in and they're a little bit
slower to get the intakes intothem straight away.
So he puts a blob of molasseson it and then we can and
they're away.
If it's a wet spring he'll feedup to four kilos of maize grain
(22:07):
.
Slow the shoot down a littlebit and get them to eat it.
Obviously that's two in themorning, two at night?
Speaker 1 (22:12):
Yeah, yeah, yeah.
So if I'm sitting there, though, listening from the other side
of the fence as the grain grower, you know it doesn't feel very
rosy at the moment.
What gives me some optimism asa grower, do you think?
Speaker 3 (22:26):
Yeah, so short term, no, it's going to be reasonably
ugly this year.
Long term, though, as a dairyfarmer, I know Cameron's
committed to using maize grainin the shed.
We've got the infrastructure.
It's a key part in our system.
It's our cows to peak reallyhigh.
We need that.
The higher their peak, theslower and the lower they fall.
So we're committed to usingmaize grain in the shed, but
(22:49):
we're also committed to makemoney and make the business
sustainable.
So, long term, ken and maizegrain grower, it's fantastic
from a gross margin to make 14tonnes at $600, brilliant gross
margin.
Is that sustainable?
Well, we see that it's not.
Is $400 a tonne gross marginsustainable?
Questionable.
So, as long as it's somewherewhere both parties can make
(23:13):
money and I think you will seethat level out to even more even
playing field this comingspring we both part is hopefully
make some money.
We should be back to a morenormal supply and demand people
hanging out for this comingseasons maize grain, so to speak
and harvest, and then we've gotway.
We go around and around again.
Speaker 1 (23:30):
Yeah, yeah.
Speaker 3 (23:31):
Once we get rid of this year's glut.
I reckon you'll find that.
Well, don't quote me on this.
Speaker 1 (23:36):
It's recorded, mate.
No, no, no.
I shouldn't say this.
Don't quote him on it Like, hey, this won't go into the public
arena at all.
No, no, no.
Speaker 3 (23:42):
I reckon by this time next year we will probably be
finding that we haven't hadenough maize grain.
Yeah, I've seen it before.
2008 is a classic when was theG you finished school with them.
Speaker 1 (23:55):
Hedger.
Speaker 3 (23:56):
Oh, yes.
So I mean, yeah, we saw it then, you know, coming off a good
high grain price, and then itwas all go, it was all great.
And then GFC hit.
Everyone had to cut costs,banks ran to the hills, so
everyone pretty much fended forthemselves.
And then the following year lowgrain prices were offered.
Come harvest, we're short,hello, bingo.
(24:17):
And this is you know commodity.
Speaker 1 (24:20):
Round and round it goes yeah and look, there are
still some positive signs on thehorizon, aren't there, in terms
of the dairy market, that theneed for high quality feed is
going to become increasinglyimportant.
With some of the things on thehorizon, particularly around the
environmental side, thehomegrown feed, locally sourced
(24:40):
as well.
Speaker 3 (24:41):
Yeah, again, like you know, we can't operate with
imported maize grain in a cowshed, in a dairy system.
We need New Zealand grown grain.
So that's priority number one.
And also, you know, calves areborn, they have milk, they also
have grain.
We need good quality grain.
I mean, I've got a bag of calfmeal.
I don't know about you, but I'malways looking for where those
(25:02):
bloody maize grain kernels inthere.
If it's not, I'll put it back.
I won't buy that again.
You know, so, yeah, we need goodquality grain.
Yeah, it's just a little bit ofa clip in the long-term system,
but a lot of the growers arecommitted but at the same time,
too, they commit.
They've got bank commitmentsand they need to make money and
if they don't make money, theywon't grow yeah that's all there
(25:23):
is about it.
You don't get out of bed tolose money no, no no, it's not
much fun.
No, not much fun at all berkey.
Speaker 2 (25:29):
I mean, you've wrapped what the history used to
be, what's happened in themarket, and then obviously
there's been a lot of dynamicsthis season.
Wade, is there any finalthoughts?
I suppose no.
I think he's wrapped it upquite nicely at the end there.
Speaker 1 (25:43):
I like the fact that we're trying to look a little
bit longer term.
You've sort of summarised thatwhole cyclical nature of
commodity markets and there is abit of a pain point there at
the moment, particularly for thegrowers.
It's an opportunity potentiallyfor the dairy market to come in
and sort of introduce maizegrain in the spring and I think,
as I say, there's some goodlong-term outlook for home, good
(26:06):
quality homegrown feed in theNew Zealand dairy market.
Speaker 3 (26:10):
Yeah, there is, I mean.
One of the challenges we haveright now, though, is trying to
get this year's crop off and ina silo where we can actually
look after it and trade it.
That's the challenge, prettymuch right now is how do we get?
there's a bit of talk around.
Do we leave the maize grain inthe paddock until we get some
space, which is fine while it'snice and dry and the grain
(26:31):
conditions are good.
But if it's still out in thepaddock in August and we're
getting some rains and theweather's changed, we want to
get that off.
But we just need to get rid ofthis lot of maize grain.
I guess that's not contractedand we also want to get rid of
some of the hangover from lastyear's supply which is still
filling up silo space.
(26:51):
Once we get rid of that and weget the crop off the ground and
dried and we get the silos fulland then hopefully the dairy
boys get a bit of cash and theycan start going.
Actually we can see a positiveoutlook and they come to the
market and farmers that arerearing calves let's be honest,
dairy farmers rear 25% of theherd as replacement or near and
(27:12):
nearabouts.
They need meal, calf meal sohopefully they come back to the
market and go.
Well, actually these are youngstock.
We need to feed them a lotrather than go.
Actually, how do we keep thebank balance in the black
instead of the red so we can getthose things aligning, and then
actually I think you'll findthat Pretty positive outlook.
Speaker 2 (27:30):
Yeah, it will be positive outlook.
Yeah, I think, just in thatthere's a piece at the moment is
communicating with our team,with your merchants as well,
because making those decisionslike leaving in the paddock and
stuff that could be even furtherdetrimental to you.
Speaker 3 (27:43):
So I think… it could be yeah.
Speaker 2 (27:46):
So having those communication lines, I suppose,
open at the moment is very bigand by all accounts it sounds
like a positive future for it.
Speaker 1 (27:55):
Well, yeah, I guess, if you look a bit further out,
yeah.
Speaker 2 (27:59):
You've got to look long term and like you say,
we've got some prettyestablished people and there's
established businesses in thisspace, so it is a long-term gain
.
Speaker 3 (28:09):
Yeah, I mean, if you're a maize-growing grower,
you normally grow.
Say, pick a number, 100hectares, oh well.
Do I grow the 100 hectares?
Oh well, do we grow the 100hectares this year, or do we
grow 120 or do we grow 80?
I guess it comes down to whatcontracts you're offered.
But, and again, every farmsystem is different you know, do
you have a few more cattle onthis year?
do you?
Do you sell some for soilage?
We do know, because in myregion anyway, soilage stacks
(28:33):
well when we do get some decentrain and the grass does grow.
We will be going into nextspring with slightly less feed
under plastic, and so the demandfor silage is going to be high.
So I mean, is it an opportunityfor a grain grower to go
actually long term?
I can sell some silage to adairy farmer.
Is that a good option?
And then next year I canactually, rather than grow 100
hectares of maize grain thisyear, I might grow 80 and 20.
(28:55):
Can I grow 120 and do 20 forsilage and 80 for maize grain?
I feel we've just got to getthrough this year and then I
think you'll see some moreequilibrium sort of pattern
coming through.
Speaker 2 (29:09):
Berkey didn't quite get me when I was talking about
having the last word or givingyou a last chance we always joke
about the new Ian Williams,isn't it?
Speaker 1 (29:16):
It's like the last word after the last charge we
always joke about the new IanWilliams, isn't?
Speaker 3 (29:19):
it.
It's like the last word afterthe last word.
Yeah, I thought you gave me thelast word and then Berkey's
buddy back on the bandwagonagain.
Sorry, man, I went round andround in circles.
Speaker 2 (29:26):
As you tend to do.
Berkey, it's been great havingyou on, mate.
One off thanks for coming on,but thanks for employing me a
few years ago, a decade ago now.
He's done all right here today,hasn't he?
Speaker 1 (29:36):
You'd give him a pass mark on that performance.
Don't you ask for grades.
He's been a bit out of actionfor a while.
Speaker 3 (29:42):
so back in the hot seat.
No, it was a good pick.
That's enough of that, Allright.
Speaker 2 (29:49):
Thanks, spooky.
Thanks, wade, it's been abloody good yarn.
If you like this, like andsubscribe.
We're on all the majorplatforms and tune in.
Next time We'll be diving intosome more maze chat.
Thanks, guys.
Speaker 1 (30:05):
Cheers.
G'day and welcome to Feed for Thought, a regular
podcast from Pioneer coveringeverything from farm systems to
crops and products and much,much more.
Speaker 2 (00:15):
Welcome back to Feed for Thought.
My name's Matt Daly and todaywe've got sidekick back Wade
Bell or I'm back in the seatYou're back.
Yeah, you've been running amokwithout me, mate.
Speaker 1 (00:27):
Well, I think the episodes have been going pretty
smoothly.
In your absence, mate, Iwouldn't be throwing stones at
this point.
Number one listener my motherdoesn't agree with that.
Speaker 2 (00:37):
Anyhow, we've got another guest with us as well
and it's nice to be interviewinghim, because about 10 years ago
he interviewed me for a jobwith Pioneer.
So him, because about 10 yearsago he interviewed me for a job
with Pioneer, so today we'rewelcoming.
Speaker 1 (00:48):
Mark Burke, Regional Manager.
Speaker 3 (00:49):
Was it a good hire Burke?
Speaker 2 (00:50):
Desperation.
I was going to say we'rerecording here.
Speaker 3 (00:53):
No no, it was a good hire.
Yes, it took a while to findthe right person, but yeah, it
was all canned in the days ofChristmas.
Speaker 2 (01:03):
They were under time pressure, basically.
Speaker 3 (01:05):
Yeah, yeah yeah, anyhow.
Speaker 2 (01:06):
so welcome, berkey, to the podcast, and today we're
going to lean on a bit of yourexperience from what you've seen
out of the markets and whatwe're seeing in the maize grain
market in particular for thisseason, because, it's fair to
say, it's been a challenging onefor a lot of people involved,
and so we want to hear a littlebit from yourself and what
you've seen in your region andwhat you understand from the
(01:28):
wider.
But we talked about you hiring,but you've done some other,
better things in your careerwith Pioneer.
You've been with us a while.
Can you tell us a little bitabout yourself?
Speaker 3 (01:36):
Yeah, so I started with Pioneer nearly 24 years ago
.
I was employed as the areamanager for the South Island.
That was pretty much fromPicton to Bluff.
I was a fresh 25-year-old.
It was probably my second job.
I think it was at a universityand I'd been in a sales role
prior.
Yeah, and I always looked up toPioneer, thinking it's a good
(01:57):
product, good company it'd bequite good to be a part of.
And then, when the role camearound, I was very successful
and here I am really.
The rest is history.
Speaker 2 (02:06):
Surely you've done more in 24 years.
Speaker 1 (02:10):
How big was the maize market in those days in the
South Island?
Speaker 3 (02:14):
It was a pretty exciting one at the moment, but
quite small at the time.
But there were some good keyloyal growers and the dairy
industry was sort of just takenoff, and at that time there was,
you know, it's a handful, butthere was a lot more grass
available and so you, generallythe farmers that were using
maize silage, were using it, fora reason.
Obviously you go back 23 yearsnow, um, and look down south and
(02:38):
now there's probably more dairyfarmers than there is farmers
selling grass silage, and somaize has become a huge part,
because you know.
Hectare of land 25 tonnes,thanks for coming.
Hectare of grass, you knowthree tonnes Could be 80 me if
it's just, you know, surplusfeed on a shoot farm, or could
be, you know, 12 me if it's asurplus grassy crop.
(02:59):
Take off, you know, inSeptember, october.
Speaker 2 (03:01):
Should we put them back down south, because you're
not down there anymore?
No, no, no so 2005 or 2006,.
Speaker 3 (03:07):
I moved back to the Lower North Island where I spent
my university days at, and hereI am really yeah.
Speaker 2 (03:16):
So now your role is the regional manager for the
Lower North Island.
Speaker 3 (03:20):
So I started off as the area manager for Lowland
North Island and then, as thecompany grew and we had to make
some staff, I guess, positions,I became the regional manager.
My regional manager role waseffectively from Gisborne to the
bottom of the Warapu, shootacross the hill to the Horofunua
or Kapiti Horofunua and thencome up to basically Kimbolton
(03:42):
is the furthest maize crop wehave really.
And then, yeah, the regionalalso includes up to Wanganui,
but my colleague Dave McDonaldpretty much looks after the
Rangitiki.
Speaker 1 (03:52):
And what's the mix there with the maize market?
So obviously, gisborne, we knowit's obviously heavy kind of
grain, hastings.
Speaker 3 (04:00):
North is pretty much 90-95% grain.
Yep, as you know, very littledairy farms in that area, which
is a good and a bad thing.
And then Central Hawke's Bay ispredominantly silage, a little
bit of grain.
Then Tararua is all silage.
Warapa is a good chunk of grainin the lower end of the Warapa
(04:21):
and then silage around sort ofcentral to northern Warapa.
Come over to the Manawatu andit's probably I don't know 50-50
grain to silage, Probably moresilage in the Manawatu than
grain.
The Rangitiki is very similarto Gisborne really.
Well somewhere in between.
It's probably 70-30% grain tosilage probably.
Speaker 2 (04:40):
I'd guess, have those regions changed over the years
In terms of their Maize usage?
Speaker 3 (04:46):
Yeah, I guess.
If you looked At CentralHawke's Bay, yes, we're now
growing Quite a large area Ofgrain In Central Hawke's Bay,
warapa.
Huge increase In maize grainGrown area In that area, which
is all Trucked out, of course, abit like Gisborne.
It's all trucked back to themarket, which is for gizmon,
it's a waikato, or struck intothe manual too, which is huge
freight bill um warapa.
(05:08):
There's a lot of dry land inthere so maize isn't suitable,
so a lot of barley and cerealsare growing, which which gets
fed into the deer industry.
So maize grain usage in thatarea is small sort of oily, but
it gets trucked out to themarketers.
Manual too is pretty much smackbang in the market is In the
thick of it In the thick of itIn the Rangitiki.
well, some of it goes toTaranaki, to the dairy market,
(05:30):
some of it goes back to theManawatu and then goes to all
sorts of places.
Speaker 2 (05:33):
Yeah, yeah.
And so the maize grain side ofthings.
How has that kind of in yourtime, probably in the LNI, how
has that changed in terms ofusage?
Speaker 3 (05:45):
Yeah.
So if you looked at usage, Iguess historically the dairy
demand was probably quite smalland a lot of it went into pig
and poultry Over the lastprobably 15, 20 years.
You drive around thecountryside and you see cow
sheds with silos, you see augers, you see auger trucks on the
roads and you talk to dairyfarmers.
(06:07):
Anyone that's bought a cow shedin the last 15 years a
reasonable cow shed is probablyput some capital aside to put in
a silo in-shed feedingmass-driven demand.
So a lot of the grain now isused in the dairy industry.
I think the numbers, if I'mcorrect, is probably somewhere
between 78% of our maize grainwe grow is used in the dairy
industry.
I think the numbers, if I'mcorrect, is probably somewhere
between 7% and 8% of our maizegrain we grow is used in the
(06:27):
dairy industry.
Whether that's in pellets or inkibble or whether that's in
calf meal, it's still in thedairy industry as such.
So huge, huge increase in usage.
I mean a lot of dairy farmerswill either do blends of grain,
grain and other feeds.
Um, they'll use if they'reusing reasonably large dairy
(06:48):
farmer they would put a, youknow, 100 ton silo in with a
crusher, whether it be hammermill or disc mill or kibler or
some sort of form.
They'll be buying the, thecommodity grain and then
crushing and feeding it intothis and shed.
And you know, some guys addminerals to that, some guys, um,
have another silo for a mineralsilo.
It's all sorts of stuff really.
It's probably come on from.
(07:09):
You know, look down inCanterbury and South Island.
Those guys down there bought,you know, conversions, bought
cow shears, put in grain, cheapgrain, and then well, they can
make a margin on that.
Well, they could, they can.
So the North Island guys didthe same pretty much.
You'd have to say, though, perky, a lot of the North Island
probably was driven by the rapidexpansion of the palm kernel
(07:31):
market you know, reallysignificant yeah, and I mean if
you looked at how was palmkernel fed in the early days I
reckon normally fiberglass,those troughs that they made.
They probably distributedthousands of them around the
countryside, fed them inpaddocks.
You pull the trough out of thepaddock.
What do you see?
Big moon, pretty much where thegreen grass is and the dirt
around it and that probablytransitioned from wastage and
(07:55):
lack of grass growing into well,we can feed this in shed.
Press a button.
Cows are on a rotary for eight,seven, eight minutes.
How much can we eat in thattime?
Perfect, a couple of kilos.
Hey, it all helps.
Speaker 1 (08:02):
Yeah.
Speaker 3 (08:02):
And it was reasonably cheap, yeah.
Speaker 2 (08:04):
Yeah, and so we've gone through that kind of
expansion into using more intodairy systems, and obviously a
lot of our maize grain in NewZealand is going into that and
we've probably got a highproportion coming into the
country as well.
Speaker 3 (08:18):
Yes, we do.
Speaker 2 (08:18):
And, as I alluded to at the start, we've got this
swell of maize grain this season.
Speaker 3 (08:24):
We do.
How has?
Speaker 2 (08:26):
that kind of played out at this stage.
Speaker 3 (08:28):
So I guess, if you step back a little bit, go back
to the spring, in terms of thepicture, there was the dairy
price or the dairy payout backin June last year was looking
positive.
Gabrielle had come through andthe perception was that grain
was going to be short.
Let's be honest, a lot of grainis grown in Gisborne and
(08:49):
Hawke's Bay.
They got hammered by Gabriel.
That probably put some skieramongst the market in terms of
geez.
How much grain are we going tohave?
Dairy farmers were using a bitof feed in that season, but not
a lot because, as you know, whenit rains the grass grows and
(09:11):
season, but not a lot because,as you know, when it rains the
grass grows.
And then come into this springof fy 24, of course, you know.
You look at the silage bunkersthey're all full, whether it be
may silage or grass silage.
So payouts not bad.
So farmers go well.
Actually, costs are lookingtight, inflation come up, so
they go.
Well.
We actually we don't need tocontract as much fee, whether it
be grass or maize or maizegrain or whatever.
And that's probably wasn'treally seen until probably
around Christmas time and, ofcourse, if you remember, back in
(09:32):
September or August, somewherearound there I think it was
payout took a huge dive Augustand you know, farmers did their
cash flows and went geez, it'salways seen as red ink.
Someone's got to go, you know,and when maize grain had a six
or seven on front of it, shegets a bit tight to make a
margin.
Then you go well.
Actually, how can we get awaywith less?
(09:53):
Yeah, and then having less, yougo well.
Actually, if you might havebought two, three, four in a ton
, if you're hard at this two ina ton, and if 10 farmers hard
two in a tonne, and if 10farmers have turned a tonne, all
of a sudden you've got 2,000tonnes.
So it doesn't take long for afew farmers to say, oh, actually
we don't need to feed as much,we can't afford to feed as much.
Then crop.
Speaker 2 (10:10):
So it was almost a double whammy.
We had more go on theexpectation out of Hawke's Bay.
Speaker 3 (10:18):
I wouldn't say more went in, matt.
I would say actually, becauseit was so wet in Hawke's Bay and
Gisborne, less went in.
Ah yeah, less maize grain wentin in those areas.
Yeah, probably about the samein everywhere else in terms of
the Warapa, manitou, rangitiki,but definitely a lot less in the
Gisborne East Coast.
Speaker 2 (10:37):
Yeah, right, but then we didn't use that grain from
last season in that peak periodthat we traditionally use it in
dairy systems.
Speaker 3 (10:45):
And I mean most dairy , if not most.
Some dairy farmers contracttheir grain for the year and
some dairy farmers pay thatspace.
Well, geez, if I need it I'llbuy it.
And so if you're a grain dealeror if you're a grain trader and
grain becomes part of your feedsupply and you sell that to
whoever wants to buy it, and allof a sudden you have to buy
(11:08):
that grain and contract it inand think, yep, I'll sell 10,000
tonnes over that period and youonly sell five.
Well, you've got 5,000 tonnessitting in a silo somewhere.
It's taking up space.
Then you've got this year'scrop going in.
You haven't sold the lastyear's 5,000.
What happens?
You've got oversupply, supplyand demand.
Those who did well third formor fourth form economics would
(11:30):
know supply and demand meanslowering price If they passed it
.
Yeah if they passed it.
Some of us did, some of usdidn't, but let's not talk about
that.
So yeah, oversupply here now,with a lower grain price,
struggling to sell.
I guess we had a weak demand, Isuppose.
Speaker 1 (11:50):
We are moving this year's grain, but it's a far
sale.
So it feels, Berky, like fromeverything you've just said
there, that it's a little bit ofa buyer's market for perhaps
for the foreseeable future, forthe short term at least.
Speaker 3 (12:00):
Yeah, I mean, yeah, I guess we are moving it.
The contracts last year wereout and about and, because you
know, think about it.
You put yourself in a grower's,in a cropping farmer's point of
view.
You always want more, you knowif you're selling lambs to the
works, you always want more.
If you're selling bulls to thefreezing works, you always want
the best.
You go to sale yards you putyour hands up.
(12:21):
Always someone wants to paymore, and so you get to.
You know the contracts on thetable.
You know, last year you soldyour grain for $600.
This year it's $500.
If you could get a contract, ohno, you can pay more than that.
And so some guys say, well, atthe end of the day I'm in the
business I sign every year,let's stay, stick to the plan.
Good, they weren't too badlyaffected, those that went.
(12:43):
Well, actually, I think theprice, I can see some future.
Speaker 1 (12:48):
I can see some upside .
Speaker 3 (12:50):
No, I'm going to sit.
And if you looked at the lastcouple of years, there's been
very little difference betweenspring and autumn pricing.
In fact, last year there was ahuge increase in the autumn
pricing of maize grain.
This year it's the opposite andit's like anything you just have
to ride it out or you have togo.
Well, actually, my business cansustain a bit of risk or no.
My business can't sustain a bitof risk and contracts I'll
(13:12):
contract in, I'm in, I'll takesome cover and you're fine
because you've got some cover,you've generally got some
storage space, you've got thedryer booked in and it's
actually easy.
Yes, you might not make as muchas you could do, but you also
might not lose as much as youcould do either, and so do guys,
do anything.
Speaker 2 (13:28):
I don't want options, some outs.
Speaker 3 (13:31):
Yeah, so where we've got a dairy market, in reality,
years from Taranaki, manitoba toHawke's Bay has now got very,
very dry.
Even now it's still very dry.
Even though we're in May nowit's still very, very dry.
We got quite dry there in Marchand April and luckily the dairy
boys go.
Actually, we still need to feedour cows, we need to make sure
(13:52):
we don't affect next year'sproduction, and so we actually
sold a lot of maize silage tothe dairy industry, which did
two things it gave them somefeed so they didn't affect next
year.
It got them through the end ofthis year and we've still got
very low covers on farms.
So we've also put some maizesilage into the beef market and
(14:13):
it's cleaned up a whole lot ofmaize that was potentially going
to go in for storage and takeup even more space and become a
bit of a cluster to.
Actually we might be able toget through this.
The biggest concern areas areis the Wairarapa and the worst
is actually the GisborneWairarapa area, because you've
got limited.
Speaker 2 (14:31):
You don't have the market.
Speaker 3 (14:32):
You don't have the market, you don't have the
market, limited infrastructureand it's all going to be trucked
out.
I mean, hey, there's not muchchange in $100 a tonne freight
and when you've got a soft maizegrain price.
My heart goes out to those guys.
They're going to find it veryhard.
But look across allagricultural industries, very,
very few will be making moneythis year.
(14:52):
So it's just, you're all in thesame boat together, really.
Speaker 2 (14:55):
So if people aren't making a dollar.
But Wade's just said it's abuyer's market before.
Speaker 1 (15:02):
Well, I'm just reading, I'm just interpreting
what he's saying here.
I hate to put words in people'smouth.
I was putting words in hismouth, it was well played at the
time.
Speaker 2 (15:11):
What are the opportunities?
Speaker 3 (15:12):
I suppose so the opportunities, if you are.
Well, let's be honest, dairyfarmers are basically now the
main usage of where this maizegrain could go or might go.
Some of the chicken and thepoultry market is out there and
they're coming in to clean upsome of the surplus, which is
fine.
But at the end of the day, itis good buying from a dairy
(15:34):
farmer's point of view, and ifyou're a dairy farmer that's got
a silo that's probably gettingempty, and if you kibble your
own, you can definitely enterthe market now and buy some
surplus maize grain, which willbe two things Great for your
farm system.
You'll get it at a reasonableprice compared to last spring
and you can actually help thegrain industry out as well.
Speaker 2 (15:57):
You don't have to tell us your buying strategies
at home, but you guys use maizegrain on your home dairy farm in
the Taranaki.
Yeah, how do you guys go aboutusing that.
Speaker 3 (16:07):
Yeah, so my brother, cameron, runs the home dairy
farm.
He's an invested owner manager,call him what you like.
We bought a new cowshoe in 2008and, of course, at that time,
what's the next thing you do?
Put a silo in.
Speaker 1 (16:20):
Or a feed pad.
Or a feed pad yep, and we go.
Speaker 3 (16:22):
well, actually silo's cheaper at the time.
So we go, well, we'll just tickthe box and put that in as well.
We also tick the box on ahammer mill and so we can then
play the commodity grains space.
And so hammer mill, and so wecan then play the commodity
grains space.
And so one of the drivingfactors towards us was well, we
wanted to feed grain in the shed, you know, cows in the platform
, for seven, eight minutes theycan eat between, well, half a
(16:45):
kilo and three or four kilos,depending on time of the year.
If you slow it, slow it down,and our objective was to my at
the time, grains were reasonably, reasonably good buying and
empty rate was probably 14% to15%.
We go well, how do we get thatdown?
So we go, well, we'll put somegrain in feed in the spring.
First 12 months empty rate wasdown about 9%, 8%, 9%, which was
(17:07):
fantastic, and grain was goodbuying.
We crushed our own.
So we played the commodityspace and ever since then we've
pretty much yeah, stick to ourrules, which we play the
commodity space and ever sincethen we've pretty much, yeah,
stick to our rules, which arecontract in the spring Every
year.
our preference, our cameraman'spreference, is maize grain.
He has used barley, at times hehas used other things as well,
but preference is maize grain.
Why maize grain?
Speaker 1 (17:30):
And it's not because I work for Pioneer.
We're putting silage in.
This is what the listeners aregoing to be thinking.
This is what the listeners aregoing to be thinking yeah, yeah,
yeah.
Speaker 3 (17:35):
I have no input on what he puts through the cashier
.
I let him run that I don't getinvolved.
He does what he likes.
We talk about it over Christmastable, over family dinners, but
day to day running and bigpicture stuff, it's him.
We just have some discussions.
I want to make sure I keep aseat at the Christmas table,
matt it's a good lunch or a gooddinner.
I don't want to get kicked offthe island, so to speak.
(17:55):
And so he contracts.
Every year we use three and aton, half a ton of cow maize
grain, and we feed it prettymuch from calving right through
to around about Christmas whenwe finish mating.
And then if there's anythingleft over, well, we feed that
through for half a kilo a day.
Or we go to the market marketjust buy a cheap commodity
product, the reason being youeither press the button on the
(18:16):
backing gate or just put in halfa kilo a day.
You know, give them a taste,get them on the platform yeah
staff.
Um, I love pressing a button,but of course you're down in the
rotary, you can't see the backof the yard, so it's just easy
for him to get the cows in theyard and so it works well so
even, even management things.
Speaker 2 (18:33):
So we've got stuff like lifting peak production and
whatnot and reducing empty rate, but even just little things
like management.
Speaker 3 (18:39):
Yeah, it helps.
Speaker 1 (18:41):
So it's incredibly complementary in the spring
right?
So I'll give you all of that.
The devil's advocate part of mesays and I'll come back to
something that you mentionedearlier is that the price
variability in it can sort ofmake it marginal at times.
There can be good margins someseasons not.
So, using your crystal ballyou've given us the commentary
(19:03):
about the grain market In termsof what you guys are thinking,
maybe in relation to your owndairy farm.
Are you seeing it as anopportunity where you'll say yep
in the spring?
Absolutely this year?
It's a goer from what we cansee.
Speaker 3 (19:19):
So I guess, if I wind back the clock to well.
Cameron normally makes hisdecision around feed and stuff
in terms of grains aroundSeptember, just as carving sort
of finishes or winds down and hegoes.
Well pay it was low If youthink about back in spring 2022,
he purchased his contract forthe 23 spring and that would
(19:42):
have had a six in front of itand at a $6 or $7 odd payout
there's not a lot of margin init and so he goes.
Well, I can't afford tocontinue to feed maize grain at
that price at this payout.
We'll suck it up this year, butthere's no way I'm signing a
contract that's got a six in itor even a five in it.
There are other turnovers feesI can use in the spring.
(20:03):
It won't be as good, but I'vegot to keep the business ticking
over.
And so he made the decision lastspring to sit on his hands.
He kept talking to his graincompany what's the price of all
the contracts?
No, no, I'm not signing.
And then come February he goesright, I've got something done.
And he goes well, no, it'sstill too dear.
(20:23):
And then I haven't spoken tohim for a while, but I'm pretty
sure he signed up some maizegrain just recently.
So you know, yes, when wesigned up in spring 22, we paid
a bit of money.
But this year we'll actually beokay, average that out,
providing cash flow it's not toobad, but it is a part of our
(20:44):
system.
Speaker 2 (20:44):
Yeah, and going forward it will be as well.
Speaker 3 (20:48):
We're probably like, if you think about it, at a $600
grain price, there will be manydairy farmers that are buying
grain as a commodity, crushingthemselves, feeding in a shed.
Thinking exactly the same.
Yeah, and that probably hasn'thelped the situation we're in.
Yeah, correct, yeah.
Speaker 1 (21:05):
Yeah, incredibly complementary to the system.
You know peak milk fed in thespring.
You know all the attributes ofmaize grain fed over that period
are perfect and the stars looklike they're aligning.
A little bit from a dairyfarmer's point of view at the
very least that the economicside of it looking a little more
favourable too.
Speaker 3 (21:23):
You definitely are.
I mean this year, providing thepayout stays where it is, will
be a reasonable year.
You think, you hope, but one ofthe key benefits.
We've tried barley.
He prefers maize grain.
It's slower digestion.
He says it's 14 ME, but I'm notarguing with him when he says
it's 14, it's probably closer to13.5 or 13.8, but hey, I'll
(21:44):
take his 14 any day.
He also adds minerals to it andthen to get the cows eating it
in the spring he finds that theyare slow to get used to it
after calving, even thoughthey've eaten it all year.
They have 6-8 weeks off, comeback in and they're a little bit
slower to get the intakes intothem straight away.
So he puts a blob of molasseson it and then we can and
they're away.
If it's a wet spring he'll feedup to four kilos of maize grain
(22:07):
.
Slow the shoot down a littlebit and get them to eat it.
Obviously that's two in themorning, two at night?
Speaker 1 (22:12):
Yeah, yeah, yeah.
So if I'm sitting there, though, listening from the other side
of the fence as the grain grower, you know it doesn't feel very
rosy at the moment.
What gives me some optimism asa grower, do you think?
Speaker 3 (22:26):
Yeah, so short term, no, it's going to be reasonably
ugly this year.
Long term, though, as a dairyfarmer, I know Cameron's
committed to using maize grainin the shed.
We've got the infrastructure.
It's a key part in our system.
It's our cows to peak reallyhigh.
We need that.
The higher their peak, theslower and the lower they fall.
So we're committed to usingmaize grain in the shed, but
(22:49):
we're also committed to makemoney and make the business
sustainable.
So, long term, ken and maizegrain grower, it's fantastic
from a gross margin to make 14tonnes at $600, brilliant gross
margin.
Is that sustainable?
Well, we see that it's not.
Is $400 a tonne gross marginsustainable?
Questionable.
So, as long as it's somewherewhere both parties can make
(23:13):
money and I think you will seethat level out to even more even
playing field this comingspring we both part is hopefully
make some money.
We should be back to a morenormal supply and demand people
hanging out for this comingseasons maize grain, so to speak
and harvest, and then we've gotway.
We go around and around again.
Speaker 1 (23:30):
Yeah, yeah.
Speaker 3 (23:31):
Once we get rid of this year's glut.
I reckon you'll find that.
Well, don't quote me on this.
Speaker 1 (23:36):
It's recorded, mate.
No, no, no.
I shouldn't say this.
Don't quote him on it Like, hey, this won't go into the public
arena at all.
No, no, no.
Speaker 3 (23:42):
I reckon by this time next year we will probably be
finding that we haven't hadenough maize grain.
Yeah, I've seen it before.
2008 is a classic when was theG you finished school with them.
Speaker 1 (23:55):
Hedger.
Speaker 3 (23:56):
Oh, yes.
So I mean, yeah, we saw it then, you know, coming off a good
high grain price, and then itwas all go, it was all great.
And then GFC hit.
Everyone had to cut costs,banks ran to the hills, so
everyone pretty much fended forthemselves.
And then the following year lowgrain prices were offered.
Come harvest, we're short,hello, bingo.
(24:17):
And this is you know commodity.
Speaker 1 (24:20):
Round and round it goes yeah and look, there are
still some positive signs on thehorizon, aren't there, in terms
of the dairy market, that theneed for high quality feed is
going to become increasinglyimportant.
With some of the things on thehorizon, particularly around the
environmental side, thehomegrown feed, locally sourced
(24:40):
as well.
Speaker 3 (24:41):
Yeah, again, like you know, we can't operate with
imported maize grain in a cowshed, in a dairy system.
We need New Zealand grown grain.
So that's priority number one.
And also, you know, calves areborn, they have milk, they also
have grain.
We need good quality grain.
I mean, I've got a bag of calfmeal.
I don't know about you, but I'malways looking for where those
(25:02):
bloody maize grain kernels inthere.
If it's not, I'll put it back.
I won't buy that again.
You know, so, yeah, we need goodquality grain.
Yeah, it's just a little bit ofa clip in the long-term system,
but a lot of the growers arecommitted but at the same time,
too, they commit.
They've got bank commitmentsand they need to make money and
if they don't make money, theywon't grow yeah that's all there
(25:23):
is about it.
You don't get out of bed tolose money no, no no, it's not
much fun.
No, not much fun at all berkey.
Speaker 2 (25:29):
I mean, you've wrapped what the history used to
be, what's happened in themarket, and then obviously
there's been a lot of dynamicsthis season.
Wade, is there any finalthoughts?
I suppose no.
I think he's wrapped it upquite nicely at the end there.
Speaker 1 (25:43):
I like the fact that we're trying to look a little
bit longer term.
You've sort of summarised thatwhole cyclical nature of
commodity markets and there is abit of a pain point there at
the moment, particularly for thegrowers.
It's an opportunity potentiallyfor the dairy market to come in
and sort of introduce maizegrain in the spring and I think,
as I say, there's some goodlong-term outlook for home, good
(26:06):
quality homegrown feed in theNew Zealand dairy market.
Speaker 3 (26:10):
Yeah, there is, I mean.
One of the challenges we haveright now, though, is trying to
get this year's crop off and ina silo where we can actually
look after it and trade it.
That's the challenge, prettymuch right now is how do we get?
there's a bit of talk around.
Do we leave the maize grain inthe paddock until we get some
space, which is fine while it'snice and dry and the grain
(26:31):
conditions are good.
But if it's still out in thepaddock in August and we're
getting some rains and theweather's changed, we want to
get that off.
But we just need to get rid ofthis lot of maize grain.
I guess that's not contractedand we also want to get rid of
some of the hangover from lastyear's supply which is still
filling up silo space.
(26:51):
Once we get rid of that and weget the crop off the ground and
dried and we get the silos fulland then hopefully the dairy
boys get a bit of cash and theycan start going.
Actually we can see a positiveoutlook and they come to the
market and farmers that arerearing calves let's be honest,
dairy farmers rear 25% of theherd as replacement or near and
(27:12):
nearabouts.
They need meal, calf meal sohopefully they come back to the
market and go.
Well, actually these are youngstock.
We need to feed them a lotrather than go.
Actually, how do we keep thebank balance in the black
instead of the red so we can getthose things aligning, and then
actually I think you'll findthat Pretty positive outlook.
Speaker 2 (27:30):
Yeah, it will be positive outlook.
Yeah, I think, just in thatthere's a piece at the moment is
communicating with our team,with your merchants as well,
because making those decisionslike leaving in the paddock and
stuff that could be even furtherdetrimental to you.
Speaker 3 (27:43):
So I think… it could be yeah.
Speaker 2 (27:46):
So having those communication lines, I suppose,
open at the moment is very bigand by all accounts it sounds
like a positive future for it.
Speaker 1 (27:55):
Well, yeah, I guess, if you look a bit further out,
yeah.
Speaker 2 (27:59):
You've got to look long term and like you say,
we've got some prettyestablished people and there's
established businesses in thisspace, so it is a long-term gain
.
Speaker 3 (28:09):
Yeah, I mean, if you're a maize-growing grower,
you normally grow.
Say, pick a number, 100hectares, oh well.
Do I grow the 100 hectares?
Oh well, do we grow the 100hectares this year, or do we
grow 120 or do we grow 80?
I guess it comes down to whatcontracts you're offered.
But, and again, every farmsystem is different you know, do
you have a few more cattle onthis year?
do you?
Do you sell some for soilage?
We do know, because in myregion anyway, soilage stacks
(28:33):
well when we do get some decentrain and the grass does grow.
We will be going into nextspring with slightly less feed
under plastic, and so the demandfor silage is going to be high.
So I mean, is it an opportunityfor a grain grower to go
actually long term?
I can sell some silage to adairy farmer.
Is that a good option?
And then next year I canactually, rather than grow 100
hectares of maize grain thisyear, I might grow 80 and 20.
(28:55):
Can I grow 120 and do 20 forsilage and 80 for maize grain?
I feel we've just got to getthrough this year and then I
think you'll see some moreequilibrium sort of pattern
coming through.
Speaker 2 (29:09):
Berkey didn't quite get me when I was talking about
having the last word or givingyou a last chance we always joke
about the new Ian Williams,isn't it?
Speaker 1 (29:16):
It's like the last word after the last charge we
always joke about the new IanWilliams, isn't?
Speaker 3 (29:19):
it.
It's like the last word afterthe last word.
Yeah, I thought you gave me thelast word and then Berkey's
buddy back on the bandwagonagain.
Sorry, man, I went round andround in circles.
Speaker 2 (29:26):
As you tend to do.
Berkey, it's been great havingyou on, mate.
One off thanks for coming on,but thanks for employing me a
few years ago, a decade ago now.
He's done all right here today,hasn't he?
Speaker 1 (29:36):
You'd give him a pass mark on that performance.
Don't you ask for grades.
He's been a bit out of actionfor a while.
Speaker 3 (29:42):
so back in the hot seat.
No, it was a good pick.
That's enough of that, Allright.
Speaker 2 (29:49):
Thanks, spooky.
Thanks, wade, it's been abloody good yarn.
If you like this, like andsubscribe.
We're on all the majorplatforms and tune in.
Next time We'll be diving intosome more maze chat.
Thanks, guys.
Speaker 1 (30:05):
Cheers.
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