Organic Shortfall
Broadcast: 5/04/2014 2:25:54 PM Reporter: Chris Clark
PIP COURTNEY, PRESENTER: It's easy to see the growth in organic food in recent times. Just walk into your local supermarket and you will see a range of fresh and processed foods that simply weren't there a few years ago.
While organic fruit and veggies seem to be going ahead in leaps and bounds, other crops like wheat, oats and barley are having a tougher time.
Millers and other processors can't get enough local organic grain, so they're having to import organic flour and other products to keep up with demand.
Chris Clark looks at some of the barriers to growing the organic grain market.
CHRIS CLARK, REPORTER: Each year Australia grows tens of millions of tonnes of grain, but just a tiny fraction of that total is organically certified.
For the last 20 years or so, Michael Spinks has been one of the few farmers regularly growing organic cereals.
MICHAEL SPINKS, GRAIN GROWER: There's 100,000 acres here developed for growing organic grain. We're probably 50 mile from one end to the other, so there's varying rainfall at one end to the other.
CHRIS CLARK: With several neighbours, Michael Spinks was part of a grower group which often grew the largest single stock of organic cereal grains.
MICHAEL SPINKS: Average, just a bit over a tonne to the acre. In new terms that's 2.5 tonne to the hectare.
CHRIS CLARK: But this is their final crop. The water they've relied on has been bought back by the Commonwealth for environmental use.
MICHAEL SPINKS: It's been really good to us. We've had a ball, me and all my neighbours, developing the country and marketing our grain together and whatever else, but, you know, it's time for to us move on.
CHRIS CLARK: Their exit could leave a big hole in supply for people like Craig Neale.
CRAIG NEALE, WHOLEGRAIN MILLING: We personally need around 10,000 tonne of grain. I think you'll find roughly on last year's figures there's only around 35,000 tonne of organic grain grown nationally.
CHRIS CLARK: Craig Neale runs Wholegrain Milling in Gunnedah in northern NSW. But he struggles to buy the grain he needs at a time when his business is growing at around 20 per cent a year.
CRAIG NEALE: We're finding that the primary production side of it is not growing at anywhere near that rate and that is going to cause us some problems in years to come.
CHRIS CLARK: The shortage of locally grown organic grain means some millers and food processors are importing what they need.
CRAIG NEALE: This is sometimes being supplemented by the importing of raw materials which personally I'm not in favour of. But we're finding that for the sustainability of the organic industry, that's a path a lot of the other companies are taking.
CHRIS CLARK: Because organic farmers don't use the chemical fertilisers, herbicides and pesticides of conventional farming, they have to come up with other, often more expensive, ways of dealing with pests and weeds.
Out near Balranald in the Riverina, Michael Spinks and his mates prospered because they could flood these paddocks with water from the Murrumbidgee River. A series of channels and banks allowed them to control the flow.
MICHAEL SPINKS: We can start watering as early as May sometimes but our preference is probably September/October.
CHRIS CLARK: And how long do you keep the water on?
MICHAEL SPINKS: Depending on the availability of it, if there's plenty of water about we might keep it on for six or eight weeks.
CHRIS CLARK: Moisture for the crop, but critically too, flooding was an important part of weed control.
MICHAEL SPINKS: We're lucky in that the water kills a lot of weeds for us. We hold the water on for a period of time and that wipes out a lot of weeds. I guess we've learnt to manage it as well and it's naturally very fertile. There's six or eight foot of beautiful self-mulching clay here that's been laid down by floods over thousands of years.
CHRIS CLARK: Keeping the water on kills the first crop of weeds. The next crucial step is cultivating the top layer of soil.
MICHAEL SPINKS: You need to kill any weeds that might be coming up after you drain the water off, but the main one is to conserve the moisture. So you have got to get the top worked up very fine to hold that moisture in. As soon as it starts to crack it disappears. Critical here because it's such a low rainfall area.
CHRIS CLARK: How you grow organic cereals depends also on where you grow them.
We're in the western district of Victoria. They call it the 'green triangle' because of the reliable rainfall. There's been a bit of rain lately and the paddocks have a green tinge now. Summer weeds have pushed through the topsoil, and that's Michael Nagorcka's cue.
MICHAEL NAGORCKA, WALTANNA FARMS: Timing is about 80 per cent of growing a really nice crop. Keeping up all the nutrients in the soil and having that prepared on time, weeds under control, ready to sow at the optimum time.
CHRIS CLARK: This is one of several cultivations he will do over the coming weeks to control weeds before he plants another organic crop.
How many times would you cultivate then before you put another crop in?
MICHAEL NAGORCKA: Probably up to four to five times, given the season and how wet the winter does become. But generally four to five prior to sowing.
CHRIS CLARK: It's quite a bit of work, isn't it, and obviously every time you pull the tractor over you're using fuel, it's time, it's money.
MICHAEL NAGORCKA: It is time and money but as you know - a lot of inputs, a lot of rewards. Looking after soil health equals good yields. I'm a firm believer of high inputs for high yields.
CHRIS CLARK: Like any farming enterprise, growing organic grain takes time, effort and knowledge. From sowing to harvest it usually means more intervention, more work, more expense.
MICHAEL NAGORCKA: A little bit more difficult than conventional farming. You've obviously got the weed bank to control without chemicals and so forth. So we have quite a good rotation that we use now.
CHRIS CLARK: Back in December, not long before harvest, I went to look at Michael Nagorcka's two main cereal crops, wheat and oats. These are the oats, and this is what's known as windrowing, cutting a crop and leaving it on the ground for a while to dry off.
You wouldn't usually do this to an oat crop grown with modern weed and pest control chemicals.
MICHAEL NAGORCKA: We windrow for a number of reasons. What we've got, Chris, is quite a thick crop here, with a lot of green and when you get the green in a crop, we've got things like Timothy grass. Now you can't - the crop's ripe and ready to go, but harvesting with green Timothy grass we get green heads in the sample, which we have to dry out. And we also have to windrow because of the Heliothis grub that we have this year.
CHRIS CLARK: So windrowing makes it easier to separate weeds and get a cleaner final harvest and it can reduce pest and vermin damage. With the extra work, you need to get a good yield and Michael Nagorcka says he does.
MICHAEL NAGORCKA: Our average over the last three to four years has been around the four to five tonnes to the hectare for just a standard oat crop. Obviously, the season determines what yield you get. But we've been very happy with the results so far, given the years we've had.
CHRIS CLARK: With the oats windrowed it's getting close to harvest time for the wheat.
MICHAEL NAGORCKA: If we get a good run, we generally have it done in a couple of weeks, Chris, yes.
CHRIS CLARK: Rotating crops from year to year is a huge part of weed control in any farming system. And this season in one of the wheat paddocks, a small mistake at sowing time provides a great illustration of just how big a problem weeds can be.
They missed a bit when they were sowing and in the middle of this wheat crop is a patch of just about every weed known in these parts.
MICHAEL NAGORCKA: You can see there's a prime example of what happens if you don't have plant density very early on for competition for weeds. So we are very instrumental in using narrow spacings, a given rate of sowing to get that canopy or the dense foliage happening very, very early. And that's how we control a lot of our grasses.
CHRIS CLARK: Remember, the rest of the paddock hasn't been sprayed, but careful cultivation to reduce weeds before sowing allows the wheat to outcompete its unprofitable rivals.
A lot of Michael Nagorcka's grain ends up at Craig Neale's Gunnedah mill. Not enough of it, as far as Craig Neale's concerned. The tight supply of organic cereals means he's invested millions in storage.
CRAIG NEALE: We've found that in recent years with inconsistent growing seasons and also some of our major growers no longer being in the marketplace for us to purchase from, we've had to secure our future by buying 18 to 24 months of grain in advance.
CHRIS CLARK: And just as it costs more to grow organic cereals, so it costs more to turn them into flour and get them to customers. There are the storage costs before the grain's milled and the storage costs after milling.
CRAIG NEALE: All products in our factory here are stored at six degrees or less Celsius. It's a critical factor as far as the nutritional value of grains is. Once you crack the grain, it starts to denature. So by storing it at cool temperatures you will find there's far more nutritional value and also to minimise and eliminate the infestation of insects.
CHRIS CLARK: But that obviously takes a lot of power, to run cold stores and all the rest of it? It adds to the cost of the final product, I guess?
CRAIG NEALE: My word, my word. We use in excess of $1,000 a week in electricity in cooling on its own.
CHRIS CLARK: Wholegrain milling uses stone grinding and roller milling to produce different types of organic flours. Its products cost more. That reflects the price of the grain they buy, but the organic market has its price limits too.
CRAIG NEALE: Prices are extremely high for this last harvest. I think you will find that there's prices in excess of $600 a tonne that have been paid in numerous areas. The downside to those $600 a tonne prices is from a manufacturing point of view it is on the high edge of being able to pass those costs along and make my operation viable.
CHRIS CLARK: Organic cereal growing has been an up-and-down affair. When Michael Spinks and his neighbours began growing organically certified grain 20 years ago out in the Riverina, they decided they had to set their price and stick to it.
MICHAEL SPINKS: The bloke that sells for the cheapest price sets the market. So we market cooperatively. We all set a price that we're all happy with and the processors are happy with and we all stick to it.
It was a strategy that worked well for as long as they had water.
FRANK OLD, GRAIN GROWER: From '81 to 2001, we never missed a crop - of some sort. Whether it be a winter cereal or a north seed crop. Then it got a little bit tight. We just never had water in the Murrumbidgee River and that's where we rely on.
CHRIS CLARK: The long drought in the mid 2000s saw a spike in grain prices.
FRANK OLD: Those that were fortunate enough to grow grain as grain growers, a lot of them put exorbitant prices on a product that was thin on the ground. Put pressure on the processors. They either fell by the wayside or pulled out of it because their product couldn't match the market price.
CHRIS CLARK: The drought also forced growers out of organics.
MICHAEL SPINKS: It wiped a few growers out. A lot of producers lost a lot of confidence. Some went out of it altogether, some cut back. The market shrank noticeably. Like when we got back in, started growing again three or four years ago, not a lot of the same people were still about. Some of them were. A lot of them had shrunk. Decreased their production. And it's just slowly starting to get fired up again now.
CHRIS CLARK: It's an experience that's prompted miller Craig Neale to start growing his own, so he can guarantee at least part of the supply he needs.
CRAIG NEALE: We're very worried about the short-term future of the organic industry, so we have now 5,000 acres of certified organic farming country ourselves. We've found that that's a necessary step that we've had to take to try and secure the supply.
CHRIS CLARK: Growing organic cereals is not going to work everywhere for everyone. It usually means more time in the paddock. No sooner is harvest done for Michael Nagorcka than it's time to get the machinery out and start preparing the ground for the following crop.
The first task is to get organic matter back into the soil.
MICHAEL NAGORCKA: The reason we chop the straw is to spread it evenly in the shortest amount of time to get it - like the old chaff from years ago, and get a very even blanket for a very rapid breakdown.
CHRIS CLARK: Then it's time to spread the manure and disk it in. They have their own manure recipe developed over the years. It's the basis of their fertiliser program and also a cash product in its own right.
MICHAEL NAGORCKA: Annually we go through about 30,000 metres or tonne of this annually. Of that we use approximately half and the balance is then sold off to conventional farmers.
CHRIS CLARK: OK.
MICHAEL NAGORCKA: Yes, so for us it's a lot of volume.
CHRIS CLARK: You can't just flick a switch and go organic. It takes three years to get organic certification for a farm. That's an expensive process in itself and then production costs are usually higher.
MICHAEL NAGORCKA: I think they'd be around about 20 per cent higher, if you look at the overall, by the time you take into account some of your herbicides, insecticides and that with conventional farming. We don't have any of that, however we have a bit more intense cultivation program from a weed control point of view.
But that all weighs up when it comes back to yields and so forth.
CHRIS CLARK: Michael Nagorcka believes there are other barriers too.
MICHAEL NAGORCKA: I think a lot of people are scared of weed control. I really think that that is a fundamental issue given a lot of the farms and its past history with resistance to certain things, but it comes back to rotations - what crops to grow after what. And I think having the right climate and rainfall to grow different crop types, not just cereals and canola.
CHRIS CLARK: But there are rewards if you get it right. He was certainly happy with his wheat crop this season.
MICHAEL NAGORCKA: Over the whole farm, we averaged a little bit over seven tonne across the board, which is absolutely brilliant for organics, yes.
CHRIS CLARK: And demand from the livestock industry for organic feed means there are good prices for grain even if it doesn't meet milling standards for human consumption.
MICHAEL NAGORCKA: We're only a smaller farming operation here. We only grow approximately 1,000 tonne of oats and wheat alike, but the calls we're getting for organic grain, we could sell that tenfold, you know, to what we're actually doing.
CHRIS CLARK: Meeting local demand is the first challenge for organic grain growers. There's certainly potential, but the recent past is dotted with pitfalls...
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