Farmers hopeful as La Nina goes against the grain

In 2019, nearly everything Matt Norrie planted on his grain and cotton farm died from lack of water. This year his crops are drowning.

Narrabri grain grower Matt Norrie inspects his wheat crop, a quarter of which he has already lost to floods. Picture: Charlie Peel

In 2019, nearly everything Matt Norrie planted in the dry earth on his grain and cotton farm near Narrabri in northwestern NSW died from lack of water.

This year his crops are drowning.

Since July, the Namoi River, which runs adjacent to Mr Norrie’s 1800ha farm, has flooded four times, spilling water across lower-lying fields and saturating his wheat.

He estimates a quarter of the crop has been destroyed and, depending on the weather ahead of the November harvest, much of the remaining crop’s quality could be downgraded, decreasing its value.

“We seem to be getting rain every week at the moment,” Mr Norrie said.

“It just keeps coming. It makes things a bit tricky but it’s a lot better than drought.”

Similar conditions across eastern growing regions have analysts predicting a $550m hit to Australia’s wheat crop.

Mr Norrie says the boom-bust cycle is part of life on Australian farms, particularly those sitting in fertile flood plains.

“That’s why the soil here is so good and we get such good crops,” he says. “You just have to accept that in flood years you’re going to have some losses, but it all evens itself out.”

Mr Norrie is banking on the sun coming out, giving his machinery access to the sodden fields, to harvest his prime durum wheat next month.

“If we get that rain in November again it could all be turned to feed wheat (for livestock),” he said. “Everything out there on high ground is still worth harvesting, but everything on low ground is gone.”

Profarmer Australia insights manager James Maxwell expects the rain could mean a further 10 per cent of the nation’s prime milling wheat is downgraded.

Most years, about 60 per cent of our wheat is milling grade.

This year’s La Nina system was expected to reduce that to 50 per cent but rain at key times could lower it to 40 per cent. At current prices, that’s $550m less value.

“Prior to this rain event, there were already concerns about quality, and those have just been exacerbated by this rain,” Mr Maxwell said. “We’re probably looking at some yield losses as well.”

In its September quarter outlook, the Australian Bureau of Agricultural and Resource Economics and Sciences forecast the 2022-23 national wheat harvest to be a near record $12.4bn.

But ABARES warned an “overly wet spring” could downgrade quality and the gross value.

Tight global supply has lifted world wheat prices, but market conditions forged by the war in Ukraine and drought in the US have widened the disparity in value of prime milling wheat and livestock feed grain.

It can be the difference between selling wheat at $470 a tonne or $320 a tonne. “You’ve still got this overall picture of constrained supply, but on top of that you’ve also got the quality story,” Mr Maxwell said.

“The fact that Australia is losing that quality means we’re going to see really big premiums for milling wheat in the season coming.”