A TREND toward focusing on summer crops among northern coastal grain and oilseed producers has sparked strong interest in expanding on-farm storage as growers look to play markets and create harvesting efficiencies.
With many Northern Rivers growers leaving fallow paddocks during winter to ensure they hit the ideal planting windows with well-prepared country for summer corn and soybeans, resources are directed to making the one crop pay.
Increased corn plantings look likely this year, fuelled by the best prices seen in at least 10 years for the 2014 harvest, with both gritting and feedgrain corn making $350 a tonne ex-farm.
That was up $60/t on the previous year for gritting corn and $40/t for stockfeed and came on the back of a drought-fuelled lack of supply across NSW and Queensland maize growing regions.
Rabobank grains expert Graydon Chong said local corn markets were likely to hold firm relative to declining global prices on account of low supply, underpinned by strong feedgrain demand.
North Coast agronomists said a bigger corn planting was also likely due to the need to rotate crops and break disease cycles in soybeans.
BGA Agriservices’ Mark Carter, Casino, said the ability to deal with greater volumes of summer grain during harvest and to market throughout the year to obtain premiums was behind the growing number of new silos going up.
In response, the NSW Department of Primary Industries and the Grains Research and Development Corporation (GRDC) put on a grain storage workshop at Casino last week, which dealt with everything from pests and hygiene to the economics of whether it pays to add more storage.
Senior development agronomist with Queensland’s Department of Agriculture, Fisheries and Forestry, Philip Burrill, said in a deregulated environment it was worth a grain producer’s time while building a reputation with storage so as to be seen as a reliable supplier.
“Buyers who can see you have kept records of your monitoring are going to be on the phone to you first,” he said.
While the prospect of capturing higher prices was enticing, on-farm storage was costly and needed to be justified with in-depth cost-benefit analysis, growers were told.
GRDC’s grains storage extension project national co-ordinator Chris Warrick, who travelled from Victoria for the workshop, said growers needed to work out exactly how much the storage could earn and compare that to possible returns from other investments such as more land, better harvesting gear or even paying off debt.
Mr Warrick, on behalf of GRDC, has developed a grain storage cost-benefit calculator which puts a figure on all financial gains from storage, from harvest timeliness and drying for early harvest to season trends in markets.
By using the template, these savings can then be compared to fixed and variable costs – which includes a figure for opportunity cost on capital – and a payback period determined for the cost of the extra storage.
Mr Warrick said often more than one benefit would be necessary to make storage pay and the most important thing was planning to suit individual farm needs.
Corn in focus at Stratheden
NORTHERN Rivers grain producer Peter Ludlow will increase the amount of country he plants to corn this summer by 25 per cent and has invested in two new 240 tonne silos to cater for the extra volume.
Mr Ludlow opted to leave his cropping country fallow at Stratheden, near Casino, during winter and will start planting 250 hectares of corn on spring storms, from October.
In the past he has grown winter barley but wet seasons and low prices have convinced him it makes more sense to “do one crop and do it right”.
The corn, which will be planted into January, will be grown for both the human consumption and stockfeed market, depending where the money is.
The two new silos, which take Mr Ludlow’s storage capacity up to 800t in total, were necessary first to deal with the larger volumes quickly during the narrow maize harvesting windows but second, would provide the ability to play the market and sell through the year to obtain premiums.
That, Mr Ludlow said, could make a difference in returns of up to $50/t.
Summer cropping has always been the focus at the Ludlow farm, but the move away from soybeans and into corn has come on the back of maize’s better resistance to disease, pests and rain pressure.