Big northern crop expected to offset price gains

Frost damage is expected to wipe a large tonnage off the balance sheet but there is still the large crop in the north of NSW to consider.

The cropping sector is bracing for a significant tonnage to be wiped off overall yields due to frost damage.

However, there is a small chance that prices might experience a slight uptick with the market reacting to the prospect of a reduction in supply.

While some farmers count a percentage loss due to the September 16 frost, others say the true monetary extent of the damage won’t be known until harvest.

Australian Oilseeds Federation chief executive Nick Goddard said large amounts of canola were being cut for hay.

He said many of the areas hit by frost had also experienced a dry growing season.

Mr Goddard said the next crop report was due on October 25 and he was expecting to see a significant downscale in production.

However, at this stage, he said it was too early to tell.

“Most of the damage was coming from southern NSW and northern Victoria,” he said.

On the flip side, northern NSW was experiencing a good season, which may mitigate some of the overall losses.

Australian Oilseeds Federation chief executive Nick Goddard.

Currently, canola is trending at $703 a tonne at port, and it is expected to increase in price slightly due to the estimated lack of overall production. In October last year the canola price was $657 a tonne.

NSW Farmers grains chairman and Brocklesby farmer Justin Everitt said frost at his place resulted in crop damage from 30 to 60 per cent.

He grows wheat, canola, barley, lupins, oats and peas.

He said any likely uptick in prices due to perceived falls in supply would possibly be offset by the good conditions in the north.

“The crop in northern NSW is so good that it will cover any lack of production down this way,” he said.

Mr Everitt said he expected the actual dollar value loss from the frost to be realised after harvest.

Justin Everitt of Aintree Park at Brocklesby in southern NSW. Picture: Nikki Reynolds

He said it was an excellent example of a case where multi-peril crop insurance needed to go back on the agenda for farmers.

“It is something we can’t insure for,” he said.

Meanwhile, analysis from Mercado shows that since the September Australian Bureau of Agricultural and Resource Economics and Sciences crop report was released, the major cropping zones in the Wimmera, Mallee, and South Australia have received below-average rainfall and would also experience a drop from the projected yields of 2.65 tonnes/ha for wheat in Victoria and 2.05 tonnes/ha in South Australia.

Mercado suggested that another one to two million tonnes could be wiped off the balance sheet this harvest.