Market research lifts export ambitions
GroundCover™ Issue: 119 | Author: Melissa Marino
A series of trade missions has given the Australian maize industry renewed confidence to lift its performance and push for expansion
Projected growth in maize exports is driving an industry goal to double production in Australia to one million tonnes by 2020, backed by increased plantings, improved agronomy and varieties, and advances in irrigation technology.
Maize Association of Australian (MAA) chief executive officer Liz Mann told this year’s Australian Grains Industry Conference that while there was room for only limited growth in the domestic feed market, the export market had the capacity to expand considerably.
The most promising markets are in north Asia, where Australia’s non-GM product can command a premium of more than $100/t.
Globally, there is significant demand for maize products. In terms of world grain, maize tops production, overtaking wheat in the late 1990s. In 2013, 200 million more tonnes of maize was harvested than wheat.
Although Australian production is dwarfed by production in North America, GM varieties dominate there, putting Australia in a position to take advantage of non-GM markets, particularly in Japan and South Korea, Ms Mann says.
Tony Cogswell, MAA executive member and managing director of trader Lachlan Commodities, has been at the forefront of the Australian industry’s export push into north Asia. He says it was a trade mission in 2008 funded by the GRDC and the Queensland Department of Agriculture and Fisheries that inspired the plan for Australia to increase maize production to meet growing export demand.
North Asia imports 25 million tonnes of maize each year for many uses, including stockfeed, but chief among them are the high-quality varieties for dry milling that Australia produces. “After a number of trade missions the market is now well understood,” he says. “And there would be no problem ramping up exports to the region if we’ve got the supply.”
Domestically, the market requires between 400,000 and 450,000t a year and with annual maize production at about 500,000t any production increase would go overseas, Mr Cogswell says.
Mr Cogswell says several farm-related factors would contribute to this growth. These include an increase in plantings, improved agronomic practices and new hybrid varieties promoting higher yields. Better irrigation technology would also play an important role.
An insight into advanced irrigation has been brought in by northern Victorian tomato growers, who had subsoil irrigation systems in place to push tomato yields. Many of them moved to maize production after the closure of processors forced them to seek alternative crops.
On these farms, where nutrients and water are targeted to the root zone, maize yields have been about 18t/hectare. Meanwhile in Queensland, growers with the same variety using three irrigations a season have produced yields of 12t/ha, and in New South Wales yields are about 14t/ha.
Mr Cogswell says the subsoil irrigated systems supply a controlled amount of water to the plant where and when it is required, resulting in higher yields with less water. This system also allows targeted fertiliser application with every irrigation rather than just once, which in flood irrigation systems leads to nutrients being leached away.
“Subsurface irrigation systems are using about 6.5 megalitres of water per hectare compared to traditional flood irrigation which is using 9ML/ha – and they are getting 25 per cent more yield using less water,” he says. “They have certainly lifted the bar and helped develop an understanding of where maize yields can be pushed.”
While maize is a relatively minor crop in Australia in both area and production, it can be grown over a large geographic footprint, from Queensland to Tasmania.
Although it would have to compete on price with other crops to make it an attractive option for growers to take up, Mr Cogswell says it is beneficial as a rotation crop. Grown with cotton, for example, it provides yield advantages to both crops as well as working as a disease break and enriching soil carbon levels. More plantings of maize may be encouraged as irrigation technology, agronomy and breeding improves further, he says.
Mr Cogswell would welcome further research into yield differences between the same variety “to get some data on paper as to why some growers are getting 20t/ha and others aren’t”. GRDC GrowNotes on maize are an important resource to help new growers into the industry, he says.
Although on-farm improvements have helped build yields and profit margins, Mr Cogswell says there are several external factors beyond growers’ control that will also influence the fate of export growth. A lower Australian dollar, for example, will make the product more attractive in north Asian markets.
Weather conditions will play a role in industry growth, with the price of water – more than $200/ML in 2015 – putting pressure on growers. “This year has been tough but we are starting to see improvement in southern water storages and we are looking for continued improvement in water usage,” Mr Cogswell says.
While low water storages are a challenge, it is these growing conditions that contribute to the high-quality, sun-dried maize sought by export markets. Unlike the mechanically dried product prone to breaking down from stress fractures when processed, sun-dried maize grain tends to hold its shape, resulting in larger grits when dry-milled. These are then steamed and flaked for breakfast cereal. “So our dry climate can be an advantage,” he says.
High quality is the market advantage that Australian growers can best trade upon, Mr Cogswell says. “It’s like the Australian wheat story – we are not there to feed livestock, we are there to produce a world-class grain for premium markets.”
More information:Maize Association of Australia
Region National, North, Overseas, South