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Australia could be set to import whole grain for the first time in more than a decade as drought drives up prices.

It comes as the latest crop projections forecast Western Australia will produce more than half the national crop for the first time in 20 years.

Grain Imports on the cards as Drought Drives Up Prices and Crop Forecasts Slashed

Author: Kath Sullivan, ABC Rural 

Date: 1st November, 2018

 

Australia could be set to import whole grain for the first time in more than a decade as drought drives up prices.

It comes as the latest crop projections forecast Western Australia will produce more than half the national crop for the first time in 20 years.

Farmers are calling for increased returns for their produce to meet the cost of production.

In a statement, the Department of Agriculture confirmed it had received, and was assessing, five applications to import bulk whole grain from the USA and Canada.

The applications were for wheat, canola, corn, and peas through various Australian ports.

It is not clear for what quantity or purpose the applications have been made.

"It is not appropriate for the Department to provide details of individual exporters that have submitted applications," the statement said.

Crop production forecasts down

Drought has driven the demand for grain and prices have doubled in the past year.

Agri-lender Rabobank said they expected this year's harvest would "go down as one of the worst in eastern Australia's history".

They forecast the national winter crop would produce less than 30 million tonnes of grain — 23 per cent less than last year's crop, with exports expected to have halved, year on year.

Government forecaster ABARES also reduced its expectations.

"We expect 2018-19 winter crop production to be around 15 per cent lower than our September forecast of 33.2 million tonnes," spokesman Steve Hatfield-Dodds said.

Dr Hatfield-Dodds recognised poor rainfall, frosts, and a "higher than planned area cut for hay" as reasons for the reduced outlook.

Hope that WA will meet national demand

In Queensland and NSW the bulk handler GrainCorp has closed most of its silos because those farmers able to harvest a crop are — in the majority — expected to keep grain on-farm.

In its first harvest update of the season, released this week, the bulk handler had received 1,000 tonnes of grain in NSW.

A year ago it was 200,000 tonnes, and in 2016 it was 330,000 tonnes.

However Western Australia, which typically exports most of its crop, is on track to produce 15 million tonnes of grain.

Grain growers hope WA's harvest will meet national demand and prevent any need to import foreign-grown grain.

Despite having imported grain in previous droughts, most recently 2006-07, and strict import protocols, grain growers say the risk to biosecurity is too great.

NSW Farmers said grain imports from international markets should not be allowed without a "demonstrated shortage of grain stocks in Australia".

"We can't afford to take a 'she'll be right' approach to the import of grain," NSW Farmers grains spokesman Matthew Madden said.

Biosecurity concerns

One of the grains industry's greatest biosecurity concerns is the plant disease karnal bunt.

Plant Health Australia estimates if it was established in Australia, karnal bunt would restrict access to more than 45 international markets and the grain price would fall significantly.

"Our concerns are really around the potential for weed seeds and fungal disease to be brought in on the grain, that's our clear outlier that we're concerned about," Grain Producers Australia chairman Andrew Weidmann said.

Mr Weidemann has been calling for transparent stocks reporting, arguing that the industry will have a clearer understanding of what grain is available in Australia.

"There's grain available out there," he said of the current drought.

"We know there's grain on farms and we know there's grain in the system in some respects, but we don't know the total amount of grain and that's the value of having a more transparent grains system."

The current drought is widely understood to be the largest since the grain industry was deregulated.

Imports a 'band-aid'

Already the market has seen export prices reach parity with the domestic market.

"At least six months ago the domestic prices reached import parity on the east coast," grains industry consultant Chris Heinjus said.

"The market has priced itself such that WA grain is better going east, than west [into Asia]".

Mr Heinjus said imports were a "short term band-aid that could have a long-time application" .

He said a decision about importing grain into Australia should not be made before the current winter harvest is completed early next year.

"Based on advice from ABARES, the Department of Agriculture is confident there is enough grain for export as well as the domestic market," a spokesman for Agriculture Minister David Littleproud said .

"Biosecurity risks involved in each import application are assessed individually [so] if risks can't be managed, the imports are not allowed.

"Increased input costs put pressure on every farmer."

Egg and dairy producers feel pinch too

Meanwhile, the Commercial Egg Producers Association of WA has hit out at supermarkets and called for an adjustment in egg prices so that farmers can afford grain to feed their livestock.

"The reluctance of the major retailers to acknowledge the economic impact of increased feed costs to egg farmers is unrealistic," president Ian Wilson said.

"This attitude is placing strain on WA egg farmers who need an increase to be sustainable. There needs to be an adjustment in egg prices to offset the extra costs of grain."

South Australian Dairy Association president John Hunt wants processors to help farmers absorb the grain price hike.

"The farmer can't keep on sucking up these reduced margins," Mr Hunt said.

"The cost of production, as soon as it goes up, we should be able to pass it on, especially for those selling milk to the domestic market".

Mr Hunt said other commodities, such as beer, were able to pass the increased cost of production on, but dairy was overlooked as a perishable product.

"I don't blame the retailers as much; they get made out to be the bad guy but the processors have got all of the mechanisms in there, in their contracts, that they can pass the costs on [to the retailer]," he said.

He said the cost of production for dairy farmers had increased 25 per cent over the past four years, largely due to increased power and grain prices and many dairy farmers are struggling to break even.

"If [processors] don't pass it on, we're going to end up an importing country for dairy products and nobody wants that," he said.

A convoy of trucks has rolled into the regional NSW town of Condobolin to deliver hay to more than 200 drought-affected farmers.

 

WA Convoy Delivers Much-Needed Hay to Drought-Stricken NSW Farmers

Author: Kate Cowling , Tim Fookes and Joanna Woodburn

Date: 17th August, 2018

 

Drought Hay Trucks

 

A convoy of trucks has rolled into the regional NSW town of Condobolin to deliver hay to more than 200 drought-affected farmers.

The 23 trucks, driven by volunteers, traveled from WA after hearing pleas of desperate farmers, many of whom have had to de-stock completely.

It follows last week's declaration that 100% of NSW is in drought.

The road trains have been moving across the Nullarbor since Monday, with 1,200 tonnes (2,300 bales) of hay, and arrived on Friday morning.

Bales were handed out to farmers from the Condobolin, Tullamore, Tottenham, Nymagee and Lake Cargelligo areas.

Some wiped back tears as they saw the trucks arrive in Condobolin.

The charity organisation behind the project, the Rapid Relief Team, said it had taken about two weeks to round up the hay and volunteers after people in the west heard about how bad the situation was.

Spokesman Mick Wilson said after the organisation collected $600,000, it was "like a military operation".

'Not just a farmer problem'

Farmer Fiona Aveyard, who received 10 bales of hay, said discovering she was one of the farmers getting donated hay "brought a tear to her eye".

"I never would have asked," she said. "I don't know why, because I shouldn't be embarrassed, but you always think there are people with greater need."

Like many farmers, the drought has forced Ms Aveyard to de-stock, and she said the allocation of donated hay would only last a few weeks.

"All of saleable stock is gone. We're down to core breeding stock," she said.

In spite of that, she said she had not lost her optimism.

"Drought is not just a farmer problem, it's a community problem, and to see the community helping, the Government helping and the farmers helping themselves, that's the way we're going to solve this," she said.

Stark contrast in conditions

Volunteer truck driver Peter Jewell, one of the 23 drivers who travelled from Western Australia to make the delivery, said he had been surprised by the difference in conditions as the convoy drove east.

"When we were driving over here, you could slowly see it getting drier and drier. It's not good at all," he said.

Mr Jewell said the response in small towns had been universally positive, with many people holding signs and clapping as the road trains moved through.

He said he would come back again if there were calls for more hay deliveries.

Mr Wilson said it had not taken long to secure the donated hay.

"It's the Australian tradition of care and compassion and helping your mates when they're in need," he said.

NSW deputy premier John Barilaro praised the efforts of volunteers and communities, but said today's conditions reflected the need for better planning.

"Three years ago we were dealing with floods, now we're dealing with drought," he said.

"Now is the right time to be having conversations about what's next."

 The New South Wales Government's drought assistance has tipped over $1 billion, after a fresh cash injection for struggling farmers the Premier says have faced an "unforgivably dry winter"

NSW Government announces extra $500m in drought assistance for struggling farmers

Author: Joanna Woodburn and Nour Haydar (abc.net.au)

Date: 30th July 2018

 

The New South Wales Government's drought assistance has tipped over $1 billion, after a fresh cash injection for struggling farmers the Premier says have faced an "unforgivably dry winter".

The Berejiklian Government had been criticised by regional stakeholders, including at last week's NSW Farmers Annual Conference in Sydney, for not doing enough to support those in dire straits on the land.

Premier Gladys Berejiklian today announced an additional $500 million in emergency funding to help drought-affected farmers.

The Emergency Relief Package includes $190 million for the introduction of transport subsidies of up to $20,000 to help cover the cost of transporting fodder and water.

Premier Gladys Berejiklian said the additional funding will help farmers who have faced an "unforgivably dry winter".

"We knew as a government we had to do more," she said.

Transport subsidies will be back-dated for expenses incurred since January.

The NSW Government has waived Local Land Services rates, fixed water charges and class-one agricultural vehicle registration costs.

NSW's Farm Innovation Fund — which helps farmers improve their infrastructure to better deal with weather fluctuations — has also been boosted by $150 million as part of the package.

Deputy Premier and Minister for Regional NSW John Barilaro said the relief package would assist farmers who had been forced to source fodder from interstate as local supplies diminished during a drier than expected winter.

"We said we would constantly reassess the conditions and relief measures," he said.

"The fact we've now increased our drought relief package to over $1 billion is a reflection of how serious this drought is, and how much we value the health and wellbeing of our farming and regional communities."

The NSW Farmers' Association welcomed the "generous" package but stressed the importance of it being easily accessible.

"It's not only the big costs that affect farm business cash flow. It is the small, ongoing commitments that add up," the association's president James Jackson said.

The association said the decision to backdate the subsidies recognised that planning for drought happens before the country is dry.

As part of the emergency funding, farmers will also be eligible for waivers on Local Land Services annual rates, fixed charges on water licences, registration costs for class-one agricultural vehicles, and interest on existing Farm Innovation Fund loans.

The package also includes funding for counselling and mental health services, drought-related road upgrades and animal welfare and stock disposal.

The NSW Rural Assistance Authority will begin processing applications from next Monday.

Inland rail hub for Parkes

Premier Berejiklian and Deputy Premier John Barilaro also unveiled the Government's 20-year vision for regional areas, announcing it will spend millions of dollars building an inland rail hub in Parkes.

They said the first investment would use a $4.2 billion slush fund from the sale of the Government's shares in the Snowy Hydro.

Parkes has long been identified as the epicentre of the Brisbane to Melbourne Inland Rail project, and construction on the route to Narromine is due to begin soon.

The landmark long-term plan for regional areas also puts investments in water and energy infrastructure as a key priority.

The Government said it planned to create more than 250,000 new jobs in regional areas over the next two decades.

Mr Barilaro said he expected the increased spending on infrastructure could attract an extra 185,000 new residents to live and work in regional areas.

 

In Spite of the rapidly accelerating Australian domestic prices for grain, Australian wheat remains relatively competitive on the international stage.

With United States futures recently dropping around the World Agricultural Supply and Demand Estimates report, it looked as though Australian grain would be priced at a premium to the world market.

Australian grain still internationally competitive

Author: Gregor Heard 

Date: 5th June, 2018

 

In Spite of the rapidly accelerating Australian domestic prices for grain, Australian wheat remains relatively competitive on the international stage.

With United States futures recently dropping around the World Agricultural Supply and Demand Estimates report, it looked as though Australian grain would be priced at a premium to the world market.

However, a whopping four per cent rise in Chicago Board of Trade (CBOT) wheat futures recently, on the back of concerns about the global crop, including Australia’s declining prospects, meant Australian wheat is still somewhat competitive on the world stage, with port prices of about $310 a tonne in most regions.

The prices are most competitive out of southern and western ports where domestic demand is not as strong, however as end users cast their net further afield in the hunt for grain it was expected remaining 2017-18 crop would find its way to domestic rations.

However, the world price means exporters will at least investigate the possibility of putting together further consignments of old crop.

Analysts are saying along with Australia and the US, where the winter wheat crop plant is the smallest in decades, there are emerging issues in the European Union and potentially parts of the Black Sea region.

From here the trade is monitoring the direction of the market.

If there should be another spike in basis it would appear export programs are done for the year.

Some within the industry believe it would be difficult to accumulate large parcels of grain for export.

“Certainly supplies have tightened up in this area and we were one of the ones that had a reasonable harvest last year,” said Grain Producers Australia chairman and Wimmera, Victoria, farmer Andrew Weidemann.

“Most of the barley has already been sold and I would think anyone holding grain would probably look to hold a little longer now,” he said.

“Farmers realise there is unlikely to be too much feed anywhere before at least the end of July due to the late break.

“They will either need to hold grain if they are mixed farmers with their own livestock or they will identify an opportunity in holding the grain and seeing if a further drought premium emerges in the market.

“At this stage you would have to say Australia looks unlikely to produce an average crop for 2018-19, so even if international prices do ease off a little you would imagine basis will stay high and present some selling opportunities down the track.”

AS harvest gets into full swing across all WA port zones, the outlook for this cropping season continues to improve, with the Grain Industry Association of Western Australia (GIWA) revising total State crop production estimates up to 12.3 million tonnes, with potential for 13mt

Harvest could reach 13 million tonnes

AS harvest gets into full swing across all WA port zones, the outlook for this cropping season continues to improve, with the Grain Industry Association of Western Australia (GIWA) revising total State crop production estimates up to 12.3 million tonnes, with potential for 13mt.

It’s a far cry from last year’s record 16.6mt harvest, but close to a 7pc increase on last month’s GIWA estimates and more than a 2mt improvement on August predictions.

GIWA oilseeds council chairman and author of the latest GIWA crop report, Michael Lamond, said with the exception of the north and north eastern Wheatbelt, the 2017 harvest was now shaping up to achieve average results, rather than ordinary.

He attributed the improvement to late September rains and mild temperatures throughout October which had resulted in a favourable end to the growing season and many crops harvested to date yielding “better than they look”.

“There is definitely more upside and 13 million tonnes is not out of the question,” Mr Lamond said.

“October was just unbelievable for grain fill, those mild temperatures mean that you don’t get heat shock and you get large grain and that can add a lot of tonnes in particular on late-sown crops.

“For the grower there’s quite a bit of variability, so it’s hard to estimate but there’s upside in Esperance, there’s upside in Albany West and The Lakes and in West Kwinana there is probably upside as well.”

Wheat has seen the most significant estimate jump, increasing 9.2pc to just below 6.9mt.

Although very little wheat has been harvested across the State so far, the report indicates it is likely grain yields will be higher than they look with low grain protein.

The outcome is predicted to be similar for barley crops, with early deliveries yielding well, but testing low for protein and some regions have reported germ-end stain.

State barley production is now expected to reach close to 3.2mt – a 4.4pc increase on last month’s estimates.

Mr Lamond said indications were that this trend of low-protein grain would continue due to many growers reducing their nitrogen applications throughout the dry winter and before conditions improved to a far greater extent than was expected.

 

19 Nov, 2017

Dry weather in April and a poor long-term forecast has forced some farmers in Western Australia to delay planting their canola crops. In West Arthur, farmer Neil Manuel has had the seeder loaded up with canola for the past two weeks, but without the rain he has not even been able to start. A dry outlook is also causing uncertainty......

Dry weather delays canola planting in Western Australia

 

Farmers in WA are holding off on sowing their canola crops. (ABC Rural: Jo Prendergast).

 

Dry weather in April and a poor long-term forecast has forced some farmers in Western Australia to delay planting their canola crops.

In West Arthur, farmer Neil Manuel has had the seeder loaded up with canola for the past two weeks, but without the rain he has not even been able to start.

A dry outlook is also causing uncertainty.

"I've struggled with the decision. I don't know if it's the right one or not," he said.

"But I just wanted to get a forecast with a bit more promise of rain."

Mr Manuel said if he did not get rain by June, as the forecast was predicting, he was going to have to abandon canola altogether — something he has never had to do before.

"To switch from canola to cereal will have a big impact. I haven't worked out the cost," he said.

"But it's more of a case for me that you get to a certain point and canola becomes unviable."

 

Concerned about outlook

Further north, Ross Lane has made similar management decisions.

He had planned to sow 800 hectares of canola on his farm between Wongan Hills and Kalannie, but he had held off.

"Generally we do canola first, but I'm a bit concerned about the outlook, putting canola in the ground," he said.

"So we thought we'd do a week on wheat and come back to the canola, just so we get a bit better feel for how the season will pan out before we commit to the canola."

He had about 140 millimetres of rain over summer, but none recently.

 

"We've got good moisture down 80 or 100 mil. That's obviously too deep to sow canola at the moment.

"We've sorta been in this situation before and have committed to it.

"Once you put that atrazine down, basically you're locked. We've done this a few times now and it works out pretty well for us."

 

Confidence remains strong east of Mullewa

Zac Grima and his family farm 35 kilometres east of Mullewa and have been seeding for a week.

He has sown lupins this year on the back of good summer rain.

 

Zac Grima is seeding his 2017 winter crop east of Mullewa, in Western Australia's northern agricultural region. (Supplied: Zac Grima).

 

"For February we had 200 millimetres of rain. It all didn't come at once. It was good rain, it all went in," he said.

"It meant we had a very busy summer spraying and controlling the green, but it's good because now there's plenty of subsoil moisture. The bucket is full down there."

Mr Grima said he was surprised at how close the moisture was to the surface.

"We think we are hitting it with probably 70 per cent of the crop, I think will come up on it," he said.

 

East Mullewa farmer Zac Grima shows the soil moisture in one of his paddocks during seeding. (Supplied: Zac Grima)

 

"Once it's up I'm quite confident it could go for a fair while. It's been two months now without a drop, and to see the ground still so wet, it's obviously a full profile.

"If we can just get it up I'm not panicking too much. I'd like to see rain of course, like everyone. If we can get it by the end of May we'll still be alright."

Mr Grima said the wet summer was bolstering confidence in the region.

"Without that I think there would be a few worried faces around," he said.

 

Flooded farmers now looking for rain

Just three months on from devastating floods hitting the Ravensthorpe region, farmers are now looking for more rain.

Local farmer Andy Chambers said despite receiving about 300mm for the year, clouds of dust surrounded his seeding rig as he pulled it through the paddock.

Flooding in February has caused massive erosion problems for farmers in the Ravensthorpe region, who are now having to fill gullies ahead of seeding. (ABC Rural: Tara De Landgrafft)

 

He said he was also having to do earthworks ahead of the seeding tractor to fill in gullies left behind by the flood.

"We've basically got one person on a machine in front of the seeders, doing it paddock by paddock, trying to knock down the gullies so we can work across them," he said.

 

"We'll probably have to end up getting a laser bucket or scraper in to fill them in sometime in the future."

But for now Mr Chambers said they would continue with their seeding program and hope for rain in the near future.

"Fifteen to 25 mils would be great," he said.

"There is a bit of moisture down there, like lupins and some of the beans have come up. They're a bit sparse but it shows what moisture was down there."

 

Eastern farmers pleased with season

In the state's easternmost farming district, farmers are relatively pleased with how the season has shaped up.

Adrian Perks farms between Condingup and Beaumont, near Esperance, and said it had been a great start to the season.

"Almost ideal after the big rains in February," he said.

 

Mr Perks said he was almost three quarters of the way through his seeding program, and while he wouldn't mind a little more rain, he was on track to finish around the time he does each season, with his neighbours not far behind.

"Usually around the first week of May to the middle of May seems to be when we finish give or take on the weather, but the weather's been good," he said.

"I reckon the next two weeks will see a lot of farmers getting pretty close to seeing the end of their seeding programs or not far from it."

 

Sheep sales surge during dry

The manager of a major West Australian sheep saleyard says numbers have surged recently due to dry conditions and a lack of feed for livestock.

Katanning Saleyards manager Rod Bushell said numbers have been steadily increasing as farmers have been forced to offload stock due to a lack of rainfall.

The Wednesday sale saw a record 32,000 sheep pass through the yards, the largest sale since the yards were rebuilt in 2014.

Mr Bushell said there were thousands more sheep than usual this week

.

"We've had 25,000 plus some a few times, but never over 30,000."

Mr Bushell said despite strong prices for sheep meat, most producers would have preferred to hold onto stock and sell later in the season.

But he said the weather conditions had forced them to sell off early.

"I think a lot of them wouldn't be sending them in if they had a choice," he said.

"Because the meat and wool price is so strong [most people] would want to hang onto more sheep, it's just a pity that the feed's dropped away."


Agricultural commodities analysts are expecting the price of canola to drop in coming months with larger crops of oilseeds to be harvested.  Western Australian grain producers are currently preparing for seeding, with the oil seed fetching around a $250 per tonne premium over the highest quality wheat it's expected lots of growers will opt for large canola plantings......

Global canola prices expected to fall as supplies of oilseeds rise

Posted

ABC News 

By Lucinda Jose

 

 

Agricultural commodities analysts are expecting the price of canola to drop in coming months with larger crops of oilseeds to be harvested.

Western Australian grain producers are currently preparing for seeding, with the oil seed fetching around a $250 per tonne premium over the highest quality wheat it's expected lots of growers will opt for large canola plantings.

Since December last year canola has traded in a range between $580 to $560 a tonne and just this week the price has dropped to $530 per tonne ex Kwinana.

However Profarmer commodity analyst Angus Thornton expects that price to head further south, but can not say by how much.

"Not until the global market (and as a result the local market) really get a gauge on how many oilseeds are going to be coming online this year," Mr Thornton said.

Australian canola competes with other oilseeds including soybeans Mr Thornton said with a few large South American crops recently harvested there is a lot of oilseed around.

"It is believed that all key south American soybean producing countries, except Argentina will produce their largest crop on record.

"So that is obviously meaning that there is a lot of stock that is able to find its way into export markets."

At the end of this month the United States Department of Agriculture (USDA) will release a report on its planting intention survey completed by US growers.

With wheat and corn prices subdued it is expected soybeans will be favoured.

"This year US spring crop growers, when they are making the choice between wheat, corn and soybeans at this point it seems that as though soybeans will be the more profitable options for a large number of growers.

"So ... Australian canola is competing and there is certainly a reasonable amount of downside," Mr Thornton said.

South Australian agricultural economist and grains consultant Robert Rees said the current canola price is higher than it should be and growers should consider forward selling part of this year's crop now.

"I would be locking that price in, either taking out forward contracts or similarly if they know their cost of production, I would be looking at taking out a put option," Mr Rees said.

"It is (a type of) insurance contract which you can get through any broker or most banks."

"It might cost them anywhere between $15 to $25 a tonne depending on what level of risk they are prepared to take on."

"If the price falls then all it costs you is your insurance premium," he said.

 

Canola disease considerations

Significant rain over the summer has the Western Australian Department of Agriculture and Food on alert for canola fungal diseases including Sclerotinia and Blackleg.

The department's senior plant pathologist, Dr Ravjit Khangura says growers need to factor fungicide into their plans.

"We also had a lot of Sclerotinia last year, so as a result there is quite a lot of inoculum in the paddocks already so growers really need to be really vigilant and refer to all of the black leg and Sclerotinia management guides and they should use appropriate control measures."

 

Don't write-off wheat

Despite record low wheat prices Robert Rees says the coming year is likely to bring opportunities to secure good prices.

"Don't write wheat off, for a number of reasons; right now the price is falling because it is raining in the hard red winter wheat areas of the United States."

"But there are eight major exporters and if you have a look at what happened last year one exporter failed, that was the European union, everyone else including Australia all had record crops, that is not likely to happen again." Mr Rees said

He said many of those major wheat producing nations will plant a smaller crop this year and despite huge stocks of grain there will be variation in the market.

"Countries like Ukraine and Russia are quite volatile in terms of the yield and June-July are the most critical months for those two countries."

"If they have their normal volatility that will create spikes in the wheat price and that will give growers an opportunity to lock-in some forward contracts at prices higher than they are at the moment," he said.