BY: VICTORIA O’SULLIVAN
The 2019/20 harvest season was one many West Australian farmers will be happy to put behind them.
A challenging season characterised by limited rainfall and hot temperatures resulted in a smaller-than-average grain intake. In stark contrast to the bumper crop of 16.4 million tonnes received in 2018/19, the state’s grain handler CBH received just 9.7 million tonnes.
According to industry body Grain Industry Association of Western Australia (GIWA), it was ‘one extreme to the other’ in 2019, irrespective of location.
In the north of the state grain yields were more than 50% below 2018 for all crops except oats, and in some cases up to 75% below 2018. Moving south in the state the combination of severe frost followed by very hot windy conditions resulted in unprecedented loss of production for some growers.
On the south coast of the state, some growers recorded their best-ever result due to the lack of waterlogging, while others were hampered by a lack of rain and frost.
The exception was in the higher rainfall regions of the south west, where grain yields were spectacular and quality excellent.
GIWA estimated average wheat yield for the state to be about 1.17t/ha from about 4.5 million hectares planted, the lowest for such a large area for well over 10 years.
Grain quality was ‘all over the place’, with growers delivering into more segregations than ever before due to the range in protein and screenings.
Perth-based farm consultant Shane Sander of Agvise Management Consultants says the price of wheat was the one highlight, underpinned by the significant volumes transhipped from WA to the eastern states for feed.
He said strong demand from eastern Australia and greatly reduced production out of WA saw prices strengthen later in the season. While not quite at the peaks of the 2018 harvest prices were generally at decile nine levels or greater. Spreads from milling grades to feed tightened with discounts to the lesser grades, nominal.
WA normally exports most of its grain, but Sander said for much of the harvest the WA crop was too expensive to compete at an international price level, with the eastern states market driving the price. Normally net exporters of wheat, Queensland and New South Wales crops were badly affected by drought, requiring wheat to be shipped in to meet the demands of intensive livestock producers.
Barley prices, particularly feed, were not as well-supported as wheat values. Canola values strengthened, influenced by a tight European Union balance sheet, he said.
RAIN ELUSIVE AS SEEDING STARTS
WA growers are geared up and waiting, but rainclouds are nowhere to be seen.
“Despite reasonable summer rainfall events across much of the state, we are still waiting for an opening rain event,” Sander says.
The rains they have received have been light and haven’t pushed very far into the main growing regions. With no significant events forecast in the near future, he suspects growers might be getting edgy.
“Despite the lack of rain most growers have commenced dry seeding and I’d suspect that the large portion of canola and lupins would already be in the ground.”
He doesn’t expect there to be any significant changes to planting programs at this stage.
Based on price signals, he says wheat plantings will likely be higher in 2020 with barley the obvious reduction.
Locally, he expects the influence of Covid-19 to be limited, in part because WA’s domestic market is very small. Transhipments to the eastern states will likely cease as soon as the east coast’s new crop comes online.
As for crop inputs, he said many farmers already have this year’s full requirements on farm.
He said the issues might be what effect the weak Australian dollar has on pricing inputs for the 2021 season and how would this look on the profitability of growing grain.
As exporters, WA farmers will be keeping watch on the world markets and the local currency. The International Grains Council has suggested that world demand for wheat will largely remain unchanged.
“There certainly will be significant volatility more around the currency effects on pricing into export markets.”
He said there was a lot going on in global markets before coronavirus turned up.
“Issues like swine flu, trade sanctions and market access haven’t gone away they’ve just been pushed to the side.”