New Zealand: Grain and Feed Imports Hit a Record High
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Arable farming in New Zealand is spread across the country on approximately 170,000 hectares, with the bulk of production focused in Canterbury on the South Island. Other key areas are Southland on the South Island and Manawatu, Hawke’s Bay, Wairarapa, and Waikato on the North Island. A large majority of arable hectares are irrigated on very fertile soil. As a result, climatic conditions such as droughts have less impact on yields when compared to many other Grain-growing countries. Also, farmers in New Zealand (and Canterbury, in particular) often set world records for Wheat yields.
As a result of a tiny landmass and varied topography, New Zealand has a far smaller Grain industry than its neighbor – Australia. New Zealand produces only very little feed for export while domestic demand continues to outstrip significantly domestic supply.
New Zealand Grain and feed import volumes 2022 rose to the highest level ever, importing 3.7 million metric tons (MMT), up 13 percent from the previous year. National Grain and feed demand continues to outstrip domestic supply by nearly double, with New Zealand producing 2.1 MMT in 2022 but consuming an estimated 5.8 MMT. Dairy farming continues to dominate as the largest consumer, accounting for about 75 percent, followed by poultry (12 percent) and human consumption (nine percent). Strong recent record milk prices have stimulated demand from the dairy industry to boost production.
Grain and feed imports in New Zealand are heavily driven by the returns of the dairy and poultry industry, which in recent years have seen unprecedented farm gate prices for products. However, because of rising inflation for farm inputs (including fertilizers and fuels), many analysts are concerned that any future downturn in livestock product prices could see many New Zealand operations try to reduce costs, possibly impacting Grain and feed import demand.
Palm Kernel Extract (PKE) from Indonesia and Malaysia is the most prominent feed supplement consumed in 2022, accounting for 54 percent of imports and 35 percent of total feed consumed. Distiller’s Dried Grains with Solubles (DDGS) is a high-growth import market from the United States, as well as Soybean meal from South America. The DDGS from the United States has seen the most significant growth of feed imports at 10 percent per year, almost doubling since 2017. Some shipments of Corn (and a sorghum shipment in 2020) have also come from the United States, and Corn has also been imported from Romania.
Another primary feed imported is Soybean meal, imported almost entirely from Argentina. The national dairy industry is consistently the country’s largest consumer of Grain and feed at approximately 75 percent. Most dairy farms are on non-irrigated pasture-based systems (75 to 80 percent), where up to 25 percent of the annual diet could consist of supplemental feeding. With the recently high dairy prices experienced over NZ$9.30 (US$6.05) in the last two years, farmers have looked to maximize milk yields by utilizing more “purchased” feed for conversion to milk solids.
Venezuela is entirely dependent on imported Wheat for domestic consumption. Wheat consumption estimates for marketing year (MY) 2022/23 will increase by 5 percent from the previous marketing year to 1.2 million tons, based on rising Wheat imports due to an expected recovery of the Venezuelan economy.
The national milling industry is expected to rebound in the production of pasta and Wheat flour due to the regime’s priority of increasing local processing capacity. The Venezuelan milling industry will likely translate rising prices of Wheat into higher consumer prices if commodities become less available in the market due to current global uncertainty and supply disruptions.
In MY 2021/22, the Wheat consumption estimate was 1.15 million tons. Driven by a regime policy, the domestic industry tried to increase production, but local pasta was not satisfactorily sold in the market, given the competitive prices of pasta from Turkey. In calendar year (CY) 2021, the domestic Wheat industry and the regime agreed to progressively increase demand for domestically produced pasta. The objective was to achieve a supply balance of 50 percent domestic pasta and 50 percent imported pasta through price reductions and product availability.
The annual per capita consumption of Wheat, based on a population of 28 million, remains at approximately 37 kg (82 pounds). The purchasing power of Venezuelan consumers is slowly strengthening, supported by the augmented salaries paid by the private sector and a rebound in the reception of remittances in MY 2021/22.
The milling industry is currently working at an average capacity of 24 percent. The nominal installed milling capacity is 2.54 million tons per year. Now, the milling industry produces 65 percent of total consumption. The monthly needs of the Venezuelan Wheat milling industry to supply the current domestic market and maintain reasonable inventory levels are 115,000 tons per month (50,000 tons of Hard Red Winter (HRW) Wheat, 40,000 tons of durum Wheat, 20,000 tons of Wheat blend, and 5,000 tons of soft Wheat for cookies and crackers).
Wheat Import in New Zealand
New Zealand produces milling Wheat, oats, and malting Barley for human consumption but also imports milling Wheat sourced from Australia, its closest neighbor. For the livestock industry, New Zealand produces large volumes of Corn silage and Grain Corn, feed Wheat, feed Barley, and feed oats. Despite this production, New Zealand relies on large quantities of Grain and feed imports because of the large number of livestock animals.
Wheat has historically been sourced exclusively from Australia annually, with volumes typically consistent. According to AgFlow data, New Zealand imported 190,000 tons of Wheat from Australia in Jan-Feb 2023.
Other sources: USDA
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