Agmates Editor Steve Truman writes:
The Australian Bureau of Agricultural and Resource Economics is forecasting a record-breaking 25,950million tonne wheat crop, provided there is an average season, with a gross value of $8.6 billion.
Wheat prices are at record high’s (see table below) and, if the season goes well, there will be a record crop.
Rising demand for food, less arable land across the world, competition for crops to use as food and fuel, and climate change are remaking our farm sector’s future. Click Here to read the article in the Australian
The boom is on. Last week AWB offered $400 to $420 a tonne for its benchmark Australian premium white wheat in the coming season.
The Westpac-National commodity index has surged 26 per cent in the past year. According to the index, in Australian dollars the price for wheat has risen 85 per cent in 12 months, canola 72 per cent, dairy 29 per cent. Interestingly export beef has only rising 3 per cent in the same time.
The relatively high Australian dollar to some extent is masking the strength of the rise, which in US dollars is 47 per cent above the past year.
Below is wheat growers returns since over the last 17 years. Source ABARE. The first column is the Average price per tonne across all grades of wheat. The second from 1996 on is the total value of wheat production.
- 1990-91 $132
- 1991-92 $200
- 1992-93 $166
- 1993-94 $174
- 1994-95 $237
- 1995-96 $261
- 1996-97 $213…………………..$4.8bn
- 1997-98 $198…………………..$3.7bn
- 1998-99 $187…………………..$3.9bn
- 1999-00 $195…………………..$4.5bn
- 2000-01 $232…………………..$5.1bn
- 2001-02 $262…………………..$6.3bn
- 2002-03 $266…………………..$2.7bn
- 2003-04 $216…………………..$5.6bn
- 2004-05 $197…………………..$4.1bn
- 2005-06 $206…………………..$4.3bn
- 2006-07 $233…………………..$2.5bn
- 2007-08 $377……………………$4.9bn
- 2008-09 $333……………………$8.6bn Estimated with average season
The strength of wheat prices is expected to continue for a few years. However it may not be long lived as incredibly the US is pulling 6 million acres of country out of conservation reserve to grow crops on. Click here to read that story.
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