Domestic price of coarse grains

IBISWorld forecasts the domestic price of coarse grains in New Zealand has grown at a moderate pace over the past five years, supported by global market volatility, exchange rate movements and resilient feed demand from the agricultural sector. Prices are expected to rise at an annualised 2.7% through 2025-26, reaching 97.9 index points. However, in 2025-26, prices are forecast to decline by 2.1% as easing global supply pressures and subdued feed demand offset lingering currency weakness. This result reflects the aftershocks of earlier supply disruptions linked to the COVID-19 pandemic and the Russia-Ukraine conflict, which initially pushed global grain benchmarks sharply higher. Since then, coarse grain markets have entered a stabilisation phase, with prices now moving within a narrower range as supply has caught up to demand.

Global conditions remain the key determinant of domestic pricing, given New Zealand's reliance on imports to meet feed requirements. Grain prices surged during 2021-22 and 2022-23 when Ukrainian and Russian exports were curtailed, while strong Chinese demand and shipping bottlenecks amplified international price pressure. More recently, global grain availability has improved, reinforced by record harvests in Australia and South America. The FAO Cereal Price Index fell to its lowest level since September 2020 in mid-2025, underscoring the clear easing trend in global grain markets. Still, domestic price movements have diverged somewhat from global softness due to the weaker New Zealand dollar, which has lifted landed costs for imported feed.

Local production has provided limited relief. The July 2025 AIMI survey indicated New Zealand cereal tonnage fell by about 2% on the previous season, as wet autumn weather delayed drilling in major growing regions like Canterbury. This supply constraint has added short-term firmness to domestic pricing. On demand side, feed manufacturers continue to dominate consumption, with the dairy sector accounting for the majority of use. Dairy feed demand has remained stable, while beef sector demand has eased in line with weaker international beef markets. Poultry feed requirements have held steady, while barley demand from the craft brewing segment has plateaued after years of growth.