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Grain harvest tipped to be second biggest on record, as trade tensions with China escalate

By national regional affairs reporter Lucy Barbour and Marty McCarthy, Tuesday December 1, 2020 - 11:53 EDT
ABC image
Farmers in southern NSW are harvesting one of their best crops of canola. - ABC

Australian farmers are on track to produce the second biggest grain crop ever, following years of drought and as trade relations with China grow frostier.

Commodity forecaster the Australian Bureau of Agricultural Resource Economics and Sciences (ABARES) has tipped a 51.5-million-tonne national winter crop ? 7.4 per cent higher than the most recent prediction in September.

ABARES said New South Wales, after unprecedented drought, was "on the verge" of a record crop, with a forecast production of more than 17.6 million tonnes.

The high yields are due to decent rainfall and growing conditions there, as well as in Victoria and South Australia, meaning winter crops such as wheat, barley and chickpeas had been given a boost.

"New South Wales has had good rain at the start of the season and all the way through the season really," ABARES senior economist Peter Collins said.

"And this year's national crop is second only to the really big crop we had in 2016?17."

For the major winter crops, wheat production is forecast to increase by 106 per cent from last year to 31.2 million tonnes ? the second highest on record.

Barley production should grow by 33 per cent to 12 million tonnes ? also the second highest ? while canola production is forecast to rise by 59 per cent to 3.7 million tonnes.

Michelle Penrose, site manager for Riordan Grain Services at Edenhope in Victoria?s grain growing heartland of the Wimmera, said she expects grain handling facilities to fill up completely this season.

"We have had probably a text book season really, we have had rain exactly when we needed it," she said.

"The [grain storage sites] in this area either filled up or got to 90 per cent capacity last season, but this year the yields are up on that again by quite a bit, so its fantastic for farmers in the area."

Ms Penrose said that meant farmers might have to truck their grain further for storage, or opt to keep it on farm for longer until space was available.

For rural communities recovering from drought and the economic woes associated with the coronavirus pandemic, the high yields come as a big relief.

"Your farmers are your base. If they are doing well, the rest of your community will do really well, so a good season in a small community has a massive effect," Ms Penrose said.

Growing conditions in late winter and early spring had been drier in southern Queensland and in Western Australia, meaning production forecasts have been revised down slightly for those states.

Mr Collins, however, said crop yields would still be strong.

"Even with the downward revision for Western Australia it is still going to be around its long-term average, so it's not a disaster by any stretch of the imagination," he said.

"And in Queensland, significant parts of their cropping area have been drier than average for large parts of the year."

Bumper harvest as trade tensions high

Victorian grain grower David Jochinke is well into his harvest near Horsham in the state's west, and said the results were "absolutely fantastic" for the south-eastern states.

It has been a tense year for the grains industry, after China kicked off a trade war with Australia by .

Mr Jochinke said he hoped this season's high yields would help offset the financial damage caused by the spat.

"If we can't make it up in price, we'd prefer to make it up in yields," he said.

But he said it would be a challenge to find markets for barley, given China had been a premium purchaser for several years.

"For the average consumer, you won't necessarily see this price in the supermarket, but for the farmers, they'll feel it on the profitability of their businesses, especially those farms coming out of drought."

He said growers might have already sold barley domestically while other countries, such as Saudi Arabia, were likely to buy at a discounted price.

Next week ABARES will release a report addressing the impact of China trade tensions on various commodities.

Mr Collins acknowledged growers would have to find new markets and likely sell into them at lower prices, but it would be "pre-emptive" to say more at this stage.

Big harvest means more jobs

New South Wales grain grower Sam Heagney said this year's high yields were having a flow-on effect in the bush and creating employment.

"If you know a farmer, he or she will be a lot happier to talk to," he said.

"It actually means there are quite a few jobs going in regional Australia at the moment, which is something particularly relevant with the economic downturn we've seen from COVID.

"There are a lot of opportunities and jobs going. Agriculture is back in business."

And he said while a drop in barley prices had had an impact on the industry, it was not as big a challenge as the drought.

"Compared to the droughts we've had, it's fine," Mr Heagney said.

"We're just happy to be farming and growing things, and as long as we've got somewhere to sell it we're happy."


© ABC 2020

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