Western Australian grain growers are expecting a double whammy this year with both grain yields and prices under pressure.
Western Australian grain growers are expecting a double whammy this year with both grain yields and prices under pressure.
Co-operative Bulk Handling (CBH) and the WA Department of Agriculture recently lowered their total winter crop estimates to between 9.8 million tonnes (mt) and 10.5mt.
While September forecasts put the 2004-2005 crop at 12.4mt – Western Australia’s second highest on record – the Department of Agriculture said a combination of dry weather and frosts had affected crop development in some of the State’s major wheat-growing areas.
The downgrade comes as prices for some of WA’s major grain exports face continued downward pressure from large overseas supplies.
WA is particularly vulnerable to world prices, given that about 90 per cent of the State’s grain production is exported.
The department estimates wheat production, which represents 70 per cent of WA’s grain total, will decline from October’s forecasts to 7mt.
This is a 22 per cent fall from September’s forecasts and also follows recent reports that the national wheat crop will struggle to reach 20mt this year.
Department of Agriculture grains analyst Anne Morcom said while the WA downgrade was disappointing it should not be talked down.
“Last year [15.3mt] was a record year,” she said.
“It also remains well above 2002-2003, which was 6.3mt.”
Ms Morcom said this winter’s crop was in line with WA’s 10-year average of 10.5mt.
ProFarmer grains analyst Dennis Wise said although the yield situation was not dire, the pricing picture “wasn’t pretty”.
World prices for WA’s three major grain exports – wheat, barley and canola – were all facing considerable challenges.
“Pool prices for the benchmark APW-grade wheat are below both 10-year and five-year averages,” Mr Wise said.
Two factors were putting downward pressure on the price of feed barley, he said, one of which was the big surplus of Black Sea feed barley coming out of Russia and the Ukraine.
“There is also the big supply of feed wheat coming on to the market out of Canada and Russia,” Mr Wise told WA Business News.
He said export subsidies for French feed barley were another factor.
Malting barley had slightly more upside to it, Mr Wise said, however China had produced a larger than expected crop and there was also significant competition coming out of Europe.
Mr Wise said the record US oil seed and soybean crop was significantly affecting canola prices.
