Agricultural exports are tipped to rebound and lift farmers’ incomes after they plumbed 10-year lows on the back of a dry spell.
After a dismal 2010-11 financial year for Western Australia’s agricultural exports, 2011-12 brings renewed hope for farmers and exporters, with this year’s winter rainfall ensuring bumper yields.
Previously in the doldrums after the federal government placed a ban on live cattle exports to Indonesia in June, WA’s cattle export industry is also said to be on the road to recovery.
The average farm cash income for the grains industry in WA dropped to its lowest level since 2001-02 averaging $90,300 per farm last financial year, data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has shown.
Barley, canola and oats were hit the worst; only $186 million of barley was exported last financial year compared to $360 million in 2009-10.
Pastoralists and Graziers Association (PGA) president Rob Gillam said the poor yields were directly related to the lack of rainfall across the state.
“Last season yields were very poor, the northern agricultural areas probably fared the best and they were mediocre, but as you went south and east it was just diabolical,” Mr Gillam said.
Last financial year only 5.3 million tonnes of wheat were exported, compared to 6.7 million tonnes in 2009-10.
However, this year’s wheat production forecasts by ABARES paint a brighter picture, with production expected to increase by 86 per cent to 8.7 million tones in 2011-12, due to favourable seasonal conditions following the drought in 2010-11.
Mr Gillam said the current wheat price of around $US236 per tonne was acceptable, but not the best it has been considering it hit the $US330 mark in June.
“The price of wheat is quite volatile but so is the Australian dollar. When production is up prices seem to be a bit on the lighter side and currently wheat is heading south,” Mr Gillam said.
“For those people that have strong yields, the price will be quite adequate, for those people in the Yilgarn and northern-Esperance region, the price won’t be adequate.”
Barley is also expected to have a bumper season, with production for 2011-12 forecast at 2 million tonnes, 57 per cent higher than last financial year.
According to the PGA, Barley is currently priced around $US280 per tonne, which is above the average of $US260 per tonne.
Despite being mainly sold interstate, oats is currently trading at a ‘very strong’ price at around $US280 per tonne.
Due to heavy rainfall in July and August, canola is also expected to perform well in 2011-12, with an increase in production of 31 per cent to 921,000 tonnes.
Although the canola price has been weaker over the past 12 months, it has recovered to match its average price of $US570 per tonne.
“I think the best gross returns will come from canola, particularly in the northern agricultural area where there are some very strong canola crops,” Mr Gillam said.
The first delivery of the 2011-12 harvest of 52 tonnes of canola was made to the CBH Group’s Geraldton terminal last week.
CBH general manager operations Colin Tutt said this season continued to shape up as potentially the second biggest ever in WA, a far cry from last year’s well below-average harvest.
“This season we are expecting yield to double, from 6.3 to 13 million tonnes of grain, of which roughly 8.5 million to 9 million will be wheat,” Mr Tutt said.
“The average harvest in WA is 11 million tonnes now and we have been off that pace for three years, so this will be the first time we will be at, or over, the average for three years.”
Mr Tutt said this year’s forecast yield was simply a result of winter rainfall creating exceptional growing conditions.
“We have had far better winter rains than we had last year, last year we had the third-lowest rainfall for the agricultural area and this year we had just below-average rains and it has just been so much better,” he said.
Meanwhile, the livestock export market in WA is said to be ‘back in business’ after the federal government lifted its ban on live cattle exports to Indonesia for slaughter in July.
According to the PGA, WA’s major exporters, Elders, Wellard Rural Exports and Emmanuel Exports, all resumed exports to Indonesia throughout August and September.
Following the lifting of the ban, the government put regulations in place which required exporters to show through audits they could trace the cattle from the port to the point of slaughter in Indonesia.
In addition, Minister for Agriculture Senator Joe Ludwig commissioned former diplomat Bill Farmer to undertake an independent review into Australia’s livestock export trade.
Mr Gillam said WA’s live export industry was “waiting with bated breath” for the outcome of the review, which is expected at the end of the month.
“The senator has not indicated what’s in the report but I think it’s generally considered that many of the conditions that have been imposed in Indonesia will be implemented worldwide for both cattle and sheep,” he said.
“The industry will live with it and hopefully it means we won’t have another problem with Indonesia like in the past.”
With many producers reacting to the ban and sending their cattle elsewhere, Mr Gillam said some exporters were now finding it tough to source the cattle.
“The market is flowing now and it’s back in business so much so that it’s hard to believe that supply is the problem now,” he said.
“The price for cattle is very strong, but some of the exporters are actually battling to get numbers to go into Indonesia.”
