Ups and downs of grain farming in Oz

AFTER leaving the torrential rain on the way to Glasgow Airport behind and after many hours of flight, it was a bit of a surprise to land in the same sort of weather conditions when we touched down at Sydney Airport.

While it was tempting to surmise that we had just flown round in a big circle, we learnt during our wait for our internal flight that the east of Australia had been seeing some of its wettest weather at this time for some years.

So, while Australia’s 2022/23 winter crop harvest was pretty near ready to get underway on the east coast, apart from a few headers rolling in central Queensland, it looked like some Scottish weather was slowing down the full roll out at this important time of year in a country which has been playing an increasingly important role in global grain production.

It would appear that although we might think of this landmass as home to major droughts, the reappearance of useful levels of precipitation have, while ensuring that crops had had a decent run through the growing season, seen growers in Oz face the sort of harvest problems which are normally more familiar to those of us growing in Scotland.

The relentless rain, which had been plaguing much of the northern states throughout autumn and winter, had left catchments and moisture profiles full to bursting point with most farmers eager to see the taps turned off.

The first week of our visit saw little signs of the quick change in weather patterns many had been hoping for. So, for the early part of the season at least, rain events across the country remained frequent and cool conditions were making it extremely difficult for paddocks to dry out, impacting crops and preventing farmers getting on with the job.

Reports of crop disease were also growing across the east coast – and although planes were being well-utilised on otherwise inaccessible country to control outbreaks – commentators were predicting that there would undoubtedly be some impact on yields and quality.

But despite these difficult conditions, the wet weather earlier in the season had also provided pretty good conditions for crop production across the country and official predictions point towards the third bumper harvest in a row for the country.

At the start of September, the country’s Department of Ag, Fisheries and Food forecast Australia’s total production for all winter crops at 55.5m tonnes which, if realised, would make it the country’s fourth largest on record.

Wheat is expected to reach 32.2m tonnes, down 11% on last year’s record result, but a considerable contribution to world supplies nonetheless. With more than sufficient sub-soil moisture to finish the crop, the focus was, however, shifting to the likely impacts on quality and how to best manage another massive, potentially wet harvest.

The difficulties in southern Queensland and NSW last year were still front of mind and those lucky enough to have a crop were eager to see it harvested as quickly and efficiently as possible.

Given the conditions and disease pressure, not to mention a reduction in fertiliser application due to high input costs, expectations were growing that the country is more than likely to see a lower percentage of wheat meeting higher protein and other quality standards.

New crop grade spreads for high-protein wheat provide some sign of these concerns with Hard 2 and Hard 1 spreads being offered in the ranges of Aus$10-$20 a tonne and $20/t-$30/t, respectively.

While these might not be huge, last year saw protein wheat prices balloon as rain continued to fall on ripe crops and exporters have been much more reluctant to make milling grade sales due to the unknown nature of the quality of the Australian crop this year.

Remaining demand could, therefore, very well see values for certain grades push higher once the combines – or headers as they are called over here – begin to roll in earnest.

The level of uncertainty surrounding harvest has resulted in a cautious approach to forward selling for most producers this year. According to the farming magazines over here, the general feel is that Australian farmers will go into harvest relatively undersold in comparison to recent times and the unknown is when and how aggressively they engage in selling once their harvest commences.

Early shipping stems are full and the Australian trade will be there to buy, but the big question currently being asked by growers and market pundits is ‘ can the good prices hold if a wave of grain hits the market?’

On top of this – although global machinations and the poor performance of the Australian dollar have seen future prices rise – these factors have also presented the same fears that we have for financing next year’s cropping plans. Fuel and fertiliser prices are also rocketing Down Under on a similar scale as that which we are suffering at home.

By way of more general background, the proportion of Australian farmland devoted to cropping has increased dramatically over the last three decades. But this trend has slowed, with signs of a decline in cropping activity in recent years, driven predominantly by declines in parts of New South Wales and South Australia.

These trends reflect adjustment within and across farms in response to economic and climate drivers, as farmers manage trade-offs between risk and return – and much of the trend towards cropping occurred largely in response to declines in wool and sheep prices in the early 1990s.

The more recent reversal reflects a shift away from cropping in some more ‘marginal’ parts of the Australian cropping zone which probably reflects both the long-term shift in rainfall patterns and more recent increases in livestock prices.

Despite this year’s rain, much of the adaptation effort on farms has been directed towards improving performance under dry conditions. Within the cropping sector there have been a variety of management practice changes implemented in recent decades – including conservation tillage and soil amelioration – which are focused on preserving soil moisture as an adaptation to reduced growing season rainfall.

Wheat yield drought risk has shown a strong improvement since 2007/8, as technology and management practice changes helped farmers improve crop yields under dry conditions. Since the mid noughties, wheat yields under dry conditions have increased by 14% – more than double the gains in yield under normal conditions over the same period.

Perhaps the widespread adoption of zero till (no-till) farming combined with stubble retention has had the most impact from a production and sustainability perspective.

Also echoing the increased interest in the area on the home front, soil fertility has been a big area of changing practice in cropping and is also responsible for big impacts on yield.

Despite recent rains, the focus has still been on managing drier conditions and growers have been realising that stored subsoil moisture is important for improving both spring and winter crops. Research has defined average yield gains (compared to poor fallow water storage) for most of New South Wales’ cropping areas of at least 1t/ha extra cereal yield, along with higher available soil nitrogen.

On the other side of the country, cropping farms in western Australia are more heavily impacted than other regions under most climate scenarios, due largely to the more substantial projected declines in winter rainfall and the resulting effects on crop yield. For these farms, government modelling has shown the potential for a significant decline in profit under the 2050 projection scenarios.

I guess it all goes to show you that while grain producers have to plan for ‘normal conditions’ there’s no guarantee that these will arrive at harvest time - and while wet countries can sometimes have a dry harvest, dry countries can sometimes have a wet one!

‘Fuel and fertiliser prices are also rocketing Down Under on a similar scale to that which we are suffering at home’