Australian wheat farmers double after record harvest
SYDNEY (Reuters) – Australian wheat farmers scour the market for planting machinery, fertilizers and other agricultural products, weeks away from the country’s main wheat-planting window, as suppliers struggle to keep up the pace of strong demand.
After harvesting their biggest wheat crop in 2020, many farmers are betting on consecutive bumper seasons, supported by good humidity levels in some of the country’s main grain areas.
Their optimism was fueled by global grain prices nearing 7-year highs, boosting demand for farm equipment amid a general economic recovery in Australia following the coronavirus pandemic, including rising house prices and a stronger labor market.
“The farms thought they were just going to call and the planters would be available and they were told it will take 6 months,” said grain farmer Xavier Martin, from the state of New South Wales, who was the largest grain in the country. – Producing state last season.
Wheat is Australia’s primary agricultural crop, generating export earnings on average of around A $ 6 billion ($ 4.6 billion) annually, and the country is generally one of the top four global exporters of this commodity.
Grain and livestock producer David Jochinke, from the state of Victoria in the south of the country, said some farmers may need to plant their crops without their regular fertilizer schedule.
“We are seeing higher prices for agricultural inputs. Even if you can get a price for it, supply is a problem, ”Jochinke said.
While farmers can plant their April / May cereals without fertilizer, they risk facing a “yield penalty” if the crops are under stress, he said.
Demand for fertilizer was also boosted due to last year’s strong harvest, which depleted soil nutrients. Farmers told Reuters that some deliveries of farm equipment and products have also been delayed by supply disruptions due to a pandemic.
The pressure on suppliers marks a sharp turnaround from just 18 months ago, when drought-ravaged eastern Australian states and most equipment were idle.
Farms are now in a good cash position, leading rural lender Rabobank, which has prompted many farmers to expand their properties and improve agricultural infrastructure such as silos.
Wheat is also not among the raw materials and products that have been caught in trade bans and other restrictions imposed by China, a major grain buyer, amid deteriorated diplomatic relations with Canberra.
Still, farmers’ confidence in this year’s wheat crop contrasts with the bleak forecast from the government’s main commodities agency, which warns that drier conditions forecast later this year could reduce yields.
The Australian Bureau of Agricultural and Resource Economics and Sciences expects wheat production in the 2021/22 season to total 25 million tonnes, down 25% from last season’s record harvest of over 33 million tonnes and in line with 10-year averages.
But at machine auctions, farmers know that if they don’t pay above the asking price, they risk missing the equipment needed to plant their crop.
Tractor dealer Roger Moylan in New South Wales’ main grain region Quirindi said it auctioned off a used tractor for 50% more than expected.
“We had eight people bidding for it,” Moylan said.
“They have to buy second-hand because new orders won’t arrive in time for planting. “
($ 1 = Australian dollars 1.2927)
Reporting by Jonathan Barrett; additional reporting by Colin Packham; edited by Richard Pullin