If covid was not enough of a challenge to the primary sector for the past two years, a major conflict in Europe has only made the job of farming 18,000km away all that much harder again after a particularly tough harvest here.
This winter Ruralco is ramping up efforts to help make members’ farming year be a simpler, lower stress affair, with the co-operative’s pool of experienced staff on hand to help members plan their new farming year ahead of the inevitable challenges that may arise.
A key part of Ruralco’s winter planning sessions will include discussing sowing options for the new season, determining crops, chemicals, fertilisers, and timing to keep the process as smooth as possible.
John Scott, Ruralco’s Grain and Seed Sales Manager says this year’s harvest was one that has tried the best of operators, and he is keen to work as closely as possible with contractors and farmers to see next season be successful.
“We have experienced what was one of the most difficult harvests in memory, with conditions really working against us from the start, and we never really caught any of the warm nor-west weather you would expect, at any stage of the harvest this year,” says John.
The damp, cool conditions laid down an ideal environment for disease and rust and depending upon whether treatments were used or not, combined with poor harvesting conditions there has been significant variance in crop yields reported throughout the region.
“At this stage we don’t know whether there is any significant impact upon seed availability, but there are delays throughout the entire process, with seed dressing plants running behind schedule due to the later harvest and covid staffing shortages,” says John.
Meantime, global events have layered on top of the harvest challenge. Even prior to Russia going to war with Ukraine, global fertiliser prices were soaring, in part due to shipment costs but also alongside rising energy costs, particularly for gas.
In the past 12 months average costs for nitrogen-based fertilisers has risen by 70% on the back of rising gas prices.
Ukraine is a net exporter of fertilisers, with one of Europe’s largest companies, Yarra, basing much of its production there. Russia, as the world’s fourth largest fertiliser manufacturer also accounts for about 10% of the global nitrogen fertiliser supply. It has slapped an export ban on products, while China has also put a stop to phosphate exports until at least June.
Overall, the ongoing war, energy costs and tight supply all mean major input costs of fuel and fertiliser are unlikely to ease before the next sowing season.
In addition, the major gap left by Ukrainian crops unlikely to be sown in the midst of war this northern spring has other countries scrambling to try and plant what land is available to them to try and overcome the looming shortfall ahead.
Ukraine, often known as the “breadbasket of Europe” with its deep rich soil’s accounts for 5% of the world’s globally traded wheat supply and 15% of its corn supply - none of which is likely to be planted while last year’s harvest can no longer be shipped through Russian controlled Black Sea ports.
The uncertainty over global grain volumes has set something of a standoff on where prices will fall here in New Zealand for contracts, but it is guaranteed that the cheap imported grain shipments of the past will not be an option in the coming year.
While it may be difficult to determine just what prices will be set on contracts, some forward planning with Ruralco can help keep the inevitably rising costs of farming under control, ensuring a “no surprises” approach for farmer shareholders, contractors, and suppliers.
Craig Rodgers, Ruralco’s Group Manager for On Farm Sales says every season has its pinch points, and this year, it’s likely to be worse than usual, thanks to the swirl of global supply and price challenges.
“It is not so much a case that you will not get the seed or fertiliser you want, but more about when you can get it – it certainly will not be a case of being able to order up your seed the day before the drill is due to go in,” he says.
He agrees Kiwi farmers have probably been spoilt by a golden run of good supply quantities and short delivery times in the past making forward planning less critical than it is under the new conditions.
“Particularly around springtime we are expecting a real pinch, and it is a short window.” He urges farmers to also talk to their contractors who may have made earlier visits prior to drilling, about plans and crops.
A winter planning session with Ruralco staff around the kitchen table may prove to be the best investment early in the season, helping identify some of the challenges, rotation options and crop combinations that make spring a lot less stressful when it finally arrives.
“And we can discuss the entire business with the people we have access to, whether that relates to crops, fuel, energy or supplies, that is the beauty of a co-operative like Ruralco with the depth of experience we have,” says Craig.
Globally it appears likely crop volumes are going to be compromised over the coming 12 months at least, and while costs have surged, opportunities are likely to arise that Ruralco Members are well positioned to take advantage of.
“With a little time and some input from the people we have, we can work to keep those higher costs to a minimum and help capitalise on whatever margins may come from higher returns on the crops,” says Craig.
To learn more and book your winter planning session, contact your Ruralco Representative on 0800 787 256.
Words by Richard Rennie, Images by Annie Studholme