Grower profits shrinking despite wheat price lift
Cropping farmers say the numbers still don't add up despite a wheat price rise, with some making just $200 profit per hectare.
Global wheat prices increased by 3 per cent last month - but growers across the country agree the price is still too low.
While northern farmers are harvesting bumper crops of up to seven tonnes a hectare, southern growers’ profits could fall to as low as $200 a hectare.
This week in Victoria, wheat is trading at $367 a tonne, up from $352 a fortnight ago.
On the international market, Rabobank senior grains and oilseeds analyst Vitor Pistoia said traders had reacted to renewed US–China trade optimism and ongoing Russia–US tensions, which supported prices, but abundant global supplies continued to limit any major rally.
He said global wheat supply was constraining any sharp rise, with Russia expected to harvest six million tonnes more than last year and European Union production forecast to be 18 million tonnes higher.
Australian wheat faced added pressure from a projected two million tonne carryover into 2025-26, Mr Pistoia said, and slightly higher production anticipated during the current harvest season, with a stronger Australian dollar also weighing on prices domestically.
Carron farmer Jason Mellings said local growers were feeling the pinch from weaker prices and rising costs.
“At $310 a tonne for APW wheat, profits can fall to as low as $200 a hectare, based on a bare-bones cost of production of around $600 a hectare,” he said.
“If you get three tonnes a hectare, that’s only about $900 a hectare coming in. It’s not terrible, it’s got a three in front of it, but there’s not a huge margin.”
Mr Mellings said with wheat, farmers in Victoria just needed to get it in the bag.
He said harvest was still a few weeks off at his place and there was time for grain size to increase after recent rain.
By contrast, northern NSW farmer Matthew Madden of Moree was already harvesting, and said growers in his area were enjoying some of the best yields in years.
However, northern and southern farmers alike say that wheat prices need to be higher.
“Some paddocks are producing between 6.5 and seven tonnes a hectare, with most averaging just under that,” he said.
“The wheat quality is reasonable, mostly APW with a smaller amount of APH, but higher yields have diluted some protein levels.”
Mr Madden said barley results were terrific too with strong yields but input prices were a constant concern for farmers.
Fertiliser alone has been around $950 a tonne to get these results. At the end of the day, both northern and southern growers agree the price is too low for the effort and expense involved.”
