Grain price pain causes grower headaches

Victorian grain growers are warehousing grain instead of selling it as cereal and canola prices fall. Here’s what you need to know.

Victorian grain growers are opting to store more grain on farm as cereal and canola prices fall.

AGP wheat, delivered to Melbourne, fell $15 a tonne last week to $460 a tonne, while H2 grade wheat fell $30 to $500 a tonne.

Non-GM canola, delivered to Melbourne, fell $30 a tonne to $795/t.

Grain Producers Australia southern region director Andrew Weidemann said the price drop was expected as harvest started, but it was creating headaches for growers who had invested heavily in inputs and needed high returns to pay off their costs.

Grain Producers Australia chairman Andrew Weidemann

“(Growers are) warehousing (grain). They’re not selling it,” he said.

“There’s still some growers will be selling it just purely to try and recoup some of the cash flow from this year.

“But fundamentally, not a lot of things have changed overseas … we know that (prices) will pick up again, it’s just a matter of timing.”

Tom Dunstan, who farms with his wife, Amity, at Telangatuk East, south of Horsham, said the drop in prices was hitting growers in his region hard.

“It has cost a lot more money to grow this crop this year than it ever has, and it’s not over yet,” he said.

“The biggest challenge that everybody’s going to face is hopefully getting some reasonable dollars for this crop and being able to do it again next year in 2023.”

Mr Dunstan said he had spent more than $700 a hectare on his canola crop, and would need a return of more than one tonne per hectare to break even.

“Wheat hasn’t been cheap either because of the extra fungicides and the urea,” he said.

“I think I have a reasonable wheat average (yield). It’s certainly got yield damage in it, but it is reasonably well drained. It is going to carry me (financially).”

He said some growers would have limited funds to spend on their crops next year.

“For a lot of people, they’re going to be finding it very challenging to try and grow a productive crop when they just don’t have the money and they can’t afford to take the risk of investing heavily in another crop.”