Grain prices soar to $380 a tonne amid demand from drought-hit interstate farmers
SOUTH Australian wheat prices have soared to $380 a tonne, spurred by unprecedented demand from drought-affected farmers in NSW and Queensland.
SOUTH Australian wheat prices have soared to $380 a tonne, spurred by unprecedented demand from drought-affected farmers in NSW and Queensland.
Farmers with grain in storage or those receiving sufficient rain to sow crops may be able to capitalise on the price, which has jumped by about $100 over the past six months.
But as dry conditions cripple SA, the much-needed feed is also being sought by our pig, dairy, sheep and chicken industries, which are being priced out of the market.
SA prices this week reached $380 a tonne for wheat (Australian Premium White) and $340 a tonne for barley feed, up from $260 a tonne in June.
Grain Producers SA chairman Wade Dabinett said the prices were a double-edge sword, helping some grain growers, but hurting other producers.
“Drought has many impacts, number one for those involved is not being able to produce anything which has an underlying effect on prices,” Mr Dabinett said.
“So those that have grain will be able to benefit from this.
“But there would be about half of the state’s production tracking okay, whereas the other half is on a knife’s edge.
“However, drought isn’t just about how bare it is in the paddocks. There’s other industries who are now impacted because feed prices have doubled, which may have overridden their margin.”
Traders say more than 270,000 tonnes of grain has been shipped from SA to Queensland and Newcastle since November, and this year’s overseas exports would “limited”.
SA usually exports about 75 per cent of its wheat production. Instead, traders have forecast more than three million tonnes of wheat, barley and canola will be moved from SA and WA to the eastern states in the year ahead.
“All of the sudden you have deficit of production versus demand in the east coast and SA grain is pulled away from the port,” Mr Dabinett said. “The Eyre Peninsula is purely an export market, but you might see grain shipped out and put back into ports in NSW, as a result of the drought.”
Primary Industries and Regions SA last week released its 2018-19 grain harvest forecast of 6.9 million tonnes, which was below the long-term average of 7.9 million tonnes.
Dry conditions at the start of the sowing season, as well as frost and wind, played a significant part in this. The crop nationally is also expected to fall to 19 million tonnes in 2018-19, down from the 10-year average of 26 million tonnes.
SA Primary Industries Minister Tim Whetstone said the conditions had provided significant challenges for farmers “but hats off to them, as they have managed to sow a variety of crops across the state”. He said SA’s grain crop would be “highly dependent on the conditions in the coming months”.