Things are looking up for WA grain producers, with a bumper crop on the way, but the outlook remains mixed for the state’s live animal exporters.
Not so long ago the prospect of a good 2013-14 harvest was looking pretty bleak for Western Australia’s grain farmers.
The dry start to winter sparked widespread concerns that the coming year’s crop would likely be a failure, sending shudders through an industry coming off a below-average performance in the previous 12 months.
The 2012-13 harvest came in around 9 million tonnes, well down on the previous year’s record of 14mt of grains exported, according to statistics released by Australian Crop Forecasters.
“Last year was pretty tough all round,” WA Farmers Federation president Dale Park said.
“Prices weren’t too bad but yields were not good.”
CBH Group head of marketing, Tom Puddy, said the pessimism disappeared, however, once the downpours started towards the end of July.
“Some farmers in the eastern Wheatbelt around Merredin still struggled and didn’t get a germination until the first or second week of August,” Mr Puddy told Business News.
“It’s unknown when that happens, but now we’ve actually produced a reasonable crop, whereas before we thought it was going to be a complete wipe-out.”
The 2013-14 harvest, forecast to come in between 12.7 and 13mt, is expected to help CBH build on its estimated revenue of $2.7 billion in 2012-13.
CBH cemented its place as the nation’s largest exporter of grains in 2012-13, exporting a national total of 5.56mt to 30 destinations.
However Mr Park said moving more grain in 2013-14 would pose extra challenges for the industry.
Brookfield Rail announced earlier this month it would close two grain freight lines in the Wheatbelt, a move he said would force thousands of trucks onto roads incapable of handling the extra traffic.
“Our worry is that once we’ve moved it, we won’t have much infrastructure left (roads),” Mr Park told Business News.
“Those roads just weren’t built to have heavy road trains put on them.
“Our reasoning is that it’s a lot cheaper if you spend money on the rail and keep the roads intact.”
Animal outlook
Tough trading conditions are expected to remain for live animal exporters in the short-term, with animal welfare concerns still dominating the headlines.
The long-term prospects, especially for cattle producers, are looking up, however.
Research from Meat & Livestock Australia showed there were 222.8 million head of cattle exported from WA in 2012-13, down 4 per cent on the previous year’s figure.
The total value of those exports was just over $159 million, down about 10 per cent on $177.3 million in 2011-12.
The state’s cattle exports comprised 35.2 per cent of the national figure in 2012-13, compared to 33.9 per cent in the previous year.
The export of live sheep continued its downward trend, falling to 1.72 million in 2013-13, down from 1.82 million in 2011-12.
In 2008-09 there were 3.11 million live sheep exported from WA ports.
Mr Park said question marks remained over the live sheep industry, with exports to the Middle East still suspended following the August 2012 incident when a shipment of sheep bound for Bahrain was rejected, resulting in an animal welfare crisis.
But he said the future prospects for live cattle exports were much rosier, especially in top market Indonesia.
“We need to be Indonesia’s back paddock,” Mr Park said.
“They are actually very, very good at feeding cattle, they get some incredible growth rates from them, and we need to help them do that.”
He said new Asian markets would drive future growth for live cattle exports, China in particular, following the state government’s announcement last week of a landmark cattle agreement with Chinese province Zhejiang.
The agreement remains in its first phases, but the aim is to develop a live cattle trade through the sharing of information and promoting opportunities.
“China is starting to eat more and more beef. Even places like Thailand, which are producers of beef, are now talking to us and saying they need some live cattle into their market,” Mr Park said.
“The prospects are good, we just have to make sure the emphasis is on animal welfare. We want to fix the problems rather than stop the trade.”
