It’s been a tumultuous season for grain growers in the western region with a dry autumn affecting preparation and continuous rain affecting sowing and spraying and flooding affecting yield.
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Now strong seasons in the northern hemisphere and some countries upgrading infrastructure means prices are fickle too.
NSW Farmers Treasurer and Trangie grain farmer Peter Wilson said stocks of grain, including wheat, barley and sorghum, are high in the northern hemisphere, affecting prices for primary producers in Australia.
“Prices are depressed, not so much just because of high yield, but because competitors such as Russia and Ukraine are getting better at storing and moving grain without waste” he said.
“They’ve always had potential to grow grain in that area, but now they can store it. They’re keeping a lid on world grain prices. This is apart from the usual producers in the European Union, United Kingdom and America.”
Mr Wilson said all is not lost, while lower grade and feed grain will have affected prices, better grades will still get premiums.
“We will still get premiums, particularly on the better quality grains, but the lower grade and feed grain will be matching them,” he said.
“There have been slight improvements to our prices. Rock bottom lows were reached in September.”
Mr Wilson said the Black Sea countries are also competitive as it costs less to grow and transport the grain.
“Our cost of production is over a third more than Russia or the Ukraine and we’re on par with Canada,” he said.
He said total supply chain handling costs in Russia were $A55 a tonne compared to $A84 here. Growing cost in Russia was $A120 a tonne compared to $A216 here.
The experienced farmer said to survive locals have to drive their on-farm costs down.
“We’ve got to have constant vigilance on our higher costs. We're always looking for ways to reduce on-farm costs,” he said.
“We have less control over off-farm costs such as storage, handling and port charges, but promoting greater competition in these areas will help drive costs down.
“If we manage to get costs down on the farm and improve yields and quality, that’s the way we survive.”