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This is fantastic. Only made on Sunday. Who said growing wheat was expensive?

Terrific video from a great new rural blog.  Grahame’s Blog

If you have a crap broadband speed like I do and the video stops/starts select pause and wait for the red line to load. The click play and it will run through without stopping.

We look forward to more great blogs from Grahame of KLR Livestock Marketing Fame.

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A poem from the west that sums up the 2008 Wheat harvest in many parts of Australia.

The Harvest from Hell…

This year will always be one to remember
We started out sane and went mad by December

The year started so well – we had cash in the bank
But things went downhill our hopes quickly sank

Costs went through the roof but our crop had potential
To make money this year good yields were essential

But on one frosty night our hopes were dashed
And to top it all off the stock market crashed

Grain prices plummeted – they said they wouldn’t!
We rang our marketers for help – they said they couldn’t!

So we focused on harvest but things went awry
When rainclouds started to fill the sky

It drizzled in the mornings – it rained at night
We had the heater on in the header – this just wasn’t right

The moisture meter became like our right arm
We’d test on the hour all over the farm

We take tests from the header, the silos, the truck
But the moisture won’t change – just our bloody luck!

We take tests to the bin praying our meters not right
But it tests even higher like we thought it just might

The men start to mope – they hang round at home
Complaining about the wife’s use of the phone

But a list of home duties placed where they will see
Has them racing to the shed where they’ll stay till tea

A day in one paddock quickly turns to seven
Hughie’s plumbing must be faulty up there in heaven

The weatherman’s forecasting more and more rain
The bank balance is starting to feel the strain

The barley’s gone mouldy the wheat’s sure to sprout
There’s more rain in the gauge who cares what amount

Christmas is canceled we’re on spending restrictions
This constant rain is causing relationship frictions

But it’s been like this before and one thing that is true
Our mood may be dark but our beer will be too!!

By Kate Furphy

(Thanks to Agmates member Rowell Walton)

The 2008 wheat harvest is finished and as predicted by Agmates, this years deregulation of the Australian Export Wheat market has been a nightmare for growers.

What should have been a real one of those catch-up years for wheat growers after years of drought has turned into a lost opportunity.

Australia’s leading grains trading commentator Malcolm Bartholomaeus [pictured], a market analyst for Callum Downs Commodity News and grain grower at Clare in South Australia said:

“Australian grain prices usually correlated highly with prices in Chicago. But this year, instead of being $10 a tonne lower, he said they had been up to $50 a tonne lower, priced off the cheaper Argentinean and Baltic Sea wheat.”

Prior to deregulation there was only one wheat exporter – AWB, now with deregulation there are 20 exporters to deal with and as Bartholomaeus says they are $50 off the Chicago price.

Growers are not dummies and have taken matters into their own hands storing 60-70% of the crop in anticipation of a better prices.

Whilst multinational traders  say they are happy with deregulation (of course, they are making money) in hindsight any honest wheat farmer would be filthy on the result. What should have been a very good ‘catch -up-year’  has turned out to be a lost opportunity.

Richard Clark [pictured] , chairman of the NSW Farmers Association grains committee, said:

“You couldn’t have picked a worse year to deregulate than this year.”

Richard Clark said it was a complex harvest that showed:

“just how unprepared the industry was for deregulation. It has turned into a logistics shambles”.

He was critical of the storage and handling systems, the slow start to the shipping program and the low prices.

Wheat growers should in particular be asking those state based farm organizations that supported deregulation how the hell they could have supported a process that has turned out to be clearly detrimental to wheat growers incomes ?

The Victorian Farmers Federation, South Australian Farmers Federation and AgForce in QLD quickly spring to mind.

Perhaps a nice ‘thank you’ letter to those organizations and these Liberal Senators who staunchly supported deregulation, Senators Bill Heffernan, and Judith Adams and Liberal MP’s Wilson Tuckey .And of course lets not forget our brilliant Agriculture Minister Tony Burke.

If you need their contact details for your letter of  ‘thanks’ just let me know by way of comment and I’ll post them for you.

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This is heart breaking for many farmers who are harvesting a bumper crop follow a number of dismal drought affected wheat crops.

TWO weeks of rain over the northern NSW grain belt have wiped hundreds of millions of dollars off the value of the wheat crop.

“Northern NSW was looking at one of the better crops it has had in a long time,” said AWB general manager of Australian commodities, Stuart Richardson.

“Then, all of a sudden, you have downgrading. It is the worst possible scenario, and it is not just NSW. There are areas of Western Australia that have copped it.

The rain has mostly affected premium Durum wheat  which is used to make pasta. It’s good news though for those farmers with Durum wheat that is not downgraded due to rain:

Typically, Australia exports durum wheat, but the looming shortfall this week pushed the price up close to import parity.

“We have growers who were looking at prices only three or four weeks ago of around $380 (per tonne) delivered Newcastle, yesterday being paid $520 delivered Newcastle,” Mr Martin said.

“Currently durum is commanding a premium above bread wheat of about $200 a tonne; last year it was $300 a tonne, and the year before it was only running at about $30 above bread wheat.

Sssshhheeessshh, who’d be a farmer, you want it to rain sometimes, then not others, then you have to know which variety to grow, where and how to market it, supply & demand dynamics etc.etc.etc – and at the end of the day they have zero control over the one thing that makes their enterprise a success or a failure – The Weather.

That’s a tough Gig.

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Australia’s largest Wheat Grower Ron Greentree is looking to store 100,000 tonnes of this years harvest on farm while he waits for better prices.

Ron Greentree, who expects to harvest a 150,000-tonne wheat crop this season, said in an interview the extra capacity was needed as weak prices meant he was in no hurry to sell his crop.

He said buyers were struggling to arrange credit because of the global financial crisis while the world was awash with wheat following bumper northern hemisphere crops.

“As far as Australia’s harvest is concerned, this financial crisis couldn’t have come at a worse time because it is really difficult for the buyers to get credit on the right terms,” Mr Greentree said.

“We’re adding storage because of deregulation,” he said

Greentree’s operation is large enough that he can choose not to deal with Grain traders. Now not only does he grow the wheat but now he becomes an internation grain marketer.

Mr Greentree has already made several trips to Japan this year, marketing his wheat to flour-millers needing high protein wheat for the manufacture of ramen noodles. He also expects sales to Vietnam and Thailand.

While sales deals have been struck, pricing and a delivery timetable have not been set, requiring Mr Greentree to boost on-farm storage to about 100,000 tonnes.

Takes grain growers into a whole new area of expertise, foreign trade. If you’re a grain grower and have kids at school it would be a good idea if they studied marketing and economics as well as Ag Science.

But then again if they are smart enough to do a triple degree maybe they should just become an investment banker or a commodities trader, getting paid millions of dollars a year in salary and bonuses.

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If the Australian Dollar had not crashed from 98 cents US a couple of months ago to 65 cents US now there would be carnage in Australia’s rural sector.

The monthly Westpac – NFF commodity price index figures are just out for October. The index is 2.6% below this time last year but would have been a whole lot worse if not for the slump in the Aussie dollar.

Beef Prices were one commodity to really benefit from the falling dollar.

Here is the index movements for last month. You’ll see that they are all over the place.

Commodities hit by falls were canola and barley (both minus 9.2%), wool (minus 8%), wheat (minus 5.9%) and cotton (down 1.8%). These falls outweighed major price rises for dairy (7.6%), sugar (4.1%) and beef (3.3%).

Quoted in the Age Newspaper senior agribusiness economist at Westpac Andrew Hanlan said:

The financial crisis had undermined pricing fundamentals. “The weakening Australian dollar prevented what could have been an extreme month for global agricultural commodities,” he said

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With Wheat harvest approaching, the Aussie Dollar plunging and world financial markets in meltdown, I was wondering how growers were coping with the marketing of their crops.

So I called one of our wheat grower Agmates Rowell Walton from Condamine Southern QLD and asked him if he’d share his thoughts with us.

Below Rowell gives us his thoughts and has kindly taken some great photos to show us what his crop looks like. Over to you Rowell [pictured below]

Well what are you doing about marketing your wheat?

Asked Steve Truman, a rare being, trying to tell the truth in the media, an idea which has become inconceivable to most.

I am afraid Steve, I am a little bit lost. The world has changed and the relative stability we once knew is gone. People are talking of 1929 and fear is haunting our financial markets. Free market capitalism is being abandoned at a much faster rate than it ever was able to entrench itself.

You would think that a grower who is well trained in selling his unregulated sorghum crop would have no trouble.

In Southern Queensland domestic regulation began to unwind in the early nineties, and export wheat lost its Guaranteed Minimum Price soon after.

It was under the Labor government and we all blamed Labor but in reality it had nothing to do with the colour of the Party, it was a long buried philosophy rising from the dead, be it incrementally. It was ugly and nasty but a new generation could not recognise it.

In that first year of the removal of the GMP our price slumped to an average $58.00 per tonne from pre harvest $175.00. A QRAA bloke sat at my table and told my family that it was unsustainable and that his advice was to sell up and leave. …well thanks mate we said.

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(more…)

Grain farmers in the Southern Half of NSW and the Northern part of Victoria are desperatley in need of rain if they are to save their winter crops.

“Werrimull Victoria – farmer Eric Yates yesterday said he expected this season’s harvest would again be well below average.

This season I’ll probably be looking at around two or three bags an acre where an average season would produce six or seven bags, but there’s no chance of that happening.”

Crops in Victoria’s northwest Mallee and northern areas of the western Wimmera district, have been stressed by hot and windy weather and unless they receive a good drink in the next two weeks they will fail completely.

In the Mallee, many crops that have enough bulk have already have been cut for hay. The Victorian Department of Primary Industries “The Break” monthly crop report, noted that most districts in Victoria received rainfall in September in the lowest 20% of historical averages.

The Australian Bureau of Agricultural and Resource Economics ABARE in September forecast Victorian wheat production would come in at 2.7 million metric tons up from last year’s state output of 1.9 million tons.

In that report ABARE predicted the Australian wheat crop would come in at 22.5 million tons, up from last years drought affected low of 13.0 million ton. On the back of mainly continuing dry conditions in South NSW & Northern Victoria some analysts are predicting that will be reduced to 20 million tons.

(thanks to Agmates Reader Rowell)

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Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

The are plenty of positives in the global financial crisis for farmers. However as the wheat harvest approaches prices for wheat halved.

Rabobank senior analyst Luke Chandler is quoted in The Age Newspaper as saying:

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Wheat was now at $A307 a tonne, compared with an average $A220-225 in recent years.

On March 11, wheat was $A497 a tonne. Mr Chandler said while prices had come back, they were well above long-term averages.

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On the positive side the Reserve Bank yesterday slashed rates by 1 percentage point, the biggest cut since 1992. Economists are predicting further cuts.

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ECONOMISTS expect more interest rate relief is on the way … with predictions the official interest rate could hit 5 per cent by Christmas.

That would involve another 100-basis-point cut in the last two meetings of the RBA board this year in November and December and would bring the big banks’ interest rates down to about 7.56 per cent if the relief was passed on in full.

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This is certainly welcome news for debt ladened rural Australia. This financial crisis might be the makings of the Rudd Labor government as an economic manager.

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Australian Scientists have made a major break through in unlocking the genetic code of wheat.

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The break through will allow the development of drought tolerant and disease resistant varieties of the plant that forms the staple diet of over 2.5 billion people.

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CSIRO plant geneticist Richard Richards .. said that by “mapping” the location of potentially important genes, the work would enable researchers to home in on the “enormous diversity” of wheat, a plant that has evolved over millions of years.

Desirable traits could be genetically engineered or enhanced through faster conventional breeding programs.

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Well done to the CSIRO.

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Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com