This newsletter is an update about the Miscanthus market because recently, the demand for Miscanthus seems to be taking off. The result is that it is a very rapidly changing investment scene. New and expanded uses for Miscanthus are appearing, and new sites are being planted.
All of the harvested material that Miscanthus New Zealand Limited (MNZ) had in store from 2019 harvest has been sold. We have only a handful of broken or partly broken bales in the Putaruru store and the material stored at Kerepehi will all be gone to customers by the end of this week.
But in addition, all of the 2020 production is now committed to existing customers, and some of it has already been sent to those customers. The rest will be going out in the next few weeks. The only area of any significant size that remains to be harvested has been slightly held up as a result of the Covid restrictions for Auckland. But that is planned to be harvested next week, weather permitting. It already has a destination customer who is committed to taking all of it. At the moment, the weather forecast for next week looks promising.
It is safe to say that demand – which continues to expand – is already exceeding supply. If anybody wants to be sure of getting some of our harvested product next winter, they will need to put in an order very soon and pay a deposit to secure the supply.
So it is evident that we need further areas to be planted, either to be grown on contract for MNZ with the sale price guaranteed, or in exceptional cases to be grown as a joint venture between MNZ and the landowner. Existing uses – such as bedding for dairy sheep – are expanding as new farms enter that industry, but new uses are also coming to the fore.
Examples of the markets now include:
Shelter on pivot irrigated dairy farms in Canterbury, which increases net production from the farm despite the area taken up by the Miscanthus.
A receptor crop for abattoir effluent to reduce leaching of nutrients to the water table, while also producing a useful product with multiple markets.
Feedstock, along with cereal straw, for the production of SuperChar – for an initial plant that is to be set up in Canterbury. MNZ has had an engineering company, Aurecon, working on the capital requirements for this. We know that this can and almost certainly will lead on to the production of renewable diesel in due course, as the plant expands.
Being a receptor crop for dairy shed effluent so that nitrogen leaching is dramatically reduced, while also producing a useful product with multiple markets.
Bedding for dairy sheep and dairy goats. The dairy sheep farms are currently the major customers for the product that MNZ harvests. The dairy goat people, who have successfully trialled Miscanthus, may take some time to be weaned from their existing bedding supplies – but these are currently going up significantly in price.
Bedding for cows, either for when they are kept off-pasture in barns during winter or when they are housed part-time in composting barns.
Bedding for calves. Demand for this is expanding rapidly, particularly in the South Island. There has been nothing but positive feedback about this use. Seriously interested farmers are establishing their own crops.
Commercial mulch is another huge market that MNZ has barely touched. Lincoln research has shown that when Miscanthus is used for commercial mulch, it is very successful. In addition, the landowner on whose property the research was done, is very enthusiastic about Miscanthus. He has reported that, unlike other mulches, the benefits of using Miscanthus mulch last for more than one season without having to be replaced. MNZ has not yet been targeting this market because we do not have sufficient material to supply any orders for commercial mulch that may come in.
MNZ had two responses to the call in the last newsletter for investment interest. These are being worked on at the moment. One of them will almost certainly add to the area that will be planted in Miscanthus this year. But MNZ needs considerably more Miscanthus to be established. Miscanthus is a profitable crop with guaranteed markets and importantly, with no work required of the landowner once it is successfully established. It is therefore an ideal crop for landowners who are getting older and who do not want to continue to put lots of physical work into their farming business.
The possibility of offering a joint venture to some landowners is also being worked on, to be used where this is required to reduce the perception of risk to the landowner. All such joint ventures will have a guaranteed market for the harvested product before they are even planted.
Now is the time for you to get directly involved.