It’s not too hard a sum to figure out – rain plus a buoyant market equals a good year for local farmers. Starting with the crop growers, Country begins a series of features by DIANNE DEMPSEY on just how well our farmers are doing and why.
“A lot of crops were struggling earlier in the season but since the recent rainfalls in central Victoria there is a much improved outlook for grain growers,” Grains Research and Development Corporation Southern Region Board deputy chairman Peter Schwarz said yesterday, speaking at the GRDC Farm Business Update.
Keen to point out the advantages of future planning for farmers, Mr Schwarz said that while the GRDC was focused on advising farmers on how to grow their crops they also wanted to add another dimension to their services.
“In this regard we want to help farmers capitalise on the good times ahead.
“Compared to a few weeks ago, some of the farmers were really struggling to get any sort of crop at all. We still have a long way to go but hopefully regional crops will do well with an average spring rainfall,” he said.
Wheat, canola and barley are the prime crops grown in the central Victoria region and Mr Scwarz said one of the characteristics of this year’s season was that most farmers had opted to diversify their crops.
“There has been, however, more canola planted this year than before and a lot of that canola crop has had trouble emerging. We’re still not sure how that’s going to pan out at this stage.
“We are also hoping that that higher grain prices will offset some of the effects of late emerging crops.”
High grain prices have largely been bought about because of the drought which has spread across more than half of the US.
According to the Australian Financial Review figures grain prices have rallied more than 50 per cent since June and during last week wheat prices in Australia went above $300 a tonne.
This is the highest level since January 2011.
Mr Schwarz said that given the positive outlook, both in terms of prices and rain, it was timely that the GRDC was concentrating on getting expert information to the business advisors who talk to the farmers.
One of the topics the GRDC Update was presenting to farmers was the need to put a grain market plan in place.
According to Mark Martin, of MarketAg, a grain plan is even more necessary in the face of the rallying grain prices.
“It is important that farmers don’t make ad hoc decisions based on emotions and hearsay,” he said. “There was a similar spike in prices in 2007/08 but fairly quickly after that prices, post-harvest, collapsed. Some farmers had taken out more forward contracts than they could actually fulfil and lost money.
“The balance is somewhere between taking advantage of the present opportunities but not going in too hard either.
“A grain plan will consist of what to grow, when and how to do it. But the other side of that plan is to get advice from a professional grain marketing advisor.”
According to Mr Schwarz the more informed the advisors are, the better equipped they are to help farmers with their grain plans.
“An example of this would be how much grain a farmer should forward contract,” he said.
“They don’t want to miss out on the good prices when they could get $300 a tonne. Then again, they’re locked in at those prices and if a farmer can’t honor his contract he could be in trouble.
“So we’re about educating the advisors to help the farmer make the most of his crop.”
Mr Schwarz said there were two extremes when it came to farmers and paperwork.
“Some of them just love it – sitting down and doing the planning; working out the finances – but there’s another group that would rather be in the paddocks all day.
“Basically everyone’s trying to make it right and we’re there to help them.”