NSW drought: Soybean prices to surge as production falls 80%

Australia’s soybean production is dropping steeply. forcing a price hike forecast to continue for months.

AUSTRALIA’S soybean production is down by 80 per cent, forcing a price hike that is forecast to continue into next year.

North Coast Oilseeds Growers Association president Paul Fleming said last year’s crop was worst the NSW North Coast had ever had.

“The North Coast area, from Tweed down to the Clarence River and inland to Tenterfield usually grows 12,000 hectares of soybean. Last year there were only 5,000 hectares and 90 per cent of that was in coastal areas,” he said.

“Usually we harvest 26,000 tonnes of soybean, this year it has only been 5,000.

“The biggest soybean producers did not even put a seed into the ground last year because it was so dry.”

Soybean farmer Paul Fleming on his property at Codrington, near Casino in northern NSW. Picture: Nathan Edwards

On average, a tonne of Australian soybean costs $500 but in 2018 it was around $850 and it expected to rise to $1,000 per tonne in 2020.

Farmers are wary of the dry conditions with producers preparing to not plant a seed for the 2020 crop until the drought breaks.

Another soybean farmer, who did not wish to be identified, said they had lost $2 million in the past two years due to the lack of rain.

It has also forced one of Australia’s biggest soy milk suppliers, Vitasoy, to source produce from overseas.

“Sadly, the one-in-100-year drought has caused a severe shortage of Australian-grown organic and conventional soybeans. This severe drought has meant this summer’s crop only delivered a small fraction of the usual and expected output for the industry,” a Vitasoy spokeswoman said.

Restaurant Catering Industry of Australia CEO Wes Lambert said consumers would have to wear some of the costs.

“Our members are telling us that the price of food and beverage has gone up three per cent. This is a follow on effect from the drought,” he said.

“Our industry is under severe cost pressures and we are instructing our members that consumers are going to have to begin to pay more for the food and beverage they price increase.

Jillian O'Riley, pictured at The Front Room cafe in Newtown, drinking a soy latte. Picture: Dylan Robinson

For Sydney soy latte drinker Jillian O’Riley, 21, she said she would be happy to pay extra and hoped it promotes a conversation about the drought.

“I wouldn’t mind. People don’t really talk about the drought here (in Sydney) and I think if the price went up they actually might start realising how it is impacting farmers,” she said.

Before the drought, soybean had been a boom industry in NSW with farmers biggest worry too much rainfall.

The industry had discovered a niche which set them apart from mass producers overseas.

“There has been a huge increase in human consumption of soybeans in the last 15 years,” Mr Fleming said.

“Around 20 years ago soybeans were predominantly used for animal feed but now there is a shift towards more and more people eating or drinking them.

“All of Australia’s crops for human consumption is not genetically modified whereas most of the big suppliers overseas use genetically modified produce.”

IBIS World reported soy milk is the dominant alternative milk category with a market share of 48 per cent in 2019.