Grain Production

The Wheat Belt |  Production Characteristics |  Early History
Marketing Australian Grain |  Wheat - An Australian Pioneer |  Formation of AWB
Other Grains |  Grain in the Australian Economy

 

Production Characteristics

In recent years the area harvested to wheat has increased significantly, largely as a result of growers switching from wool production following decreases in the price of wool. Average wheat yield per hectare has also been rising. Over the past 20 years Australian wheat yields, on average, have risen by around 1.65% per year.

Grain yields in Australia are particularly subject to variations in rainfall and seasonal conditions. This is demonstrated by national average wheat yields which have ranged from 1.14 to 2.14 tonnes per hectare over the last decade. This can result in massive changes in production levels even though changes in area sown may be quite modest. This was demonstrated in 1982, 1994, and again in 2002, when a major drought led to production of less than 10.0 million tonnes of wheat. The 1982 season was followed by a spectacular 1983/84 season with a crop of 22.0 million tonnes being produced.

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Early History

Wheat is a cereal grain of the genus Triticum. Scientists have traced its origin back to the Middle East region, and particularly to the valley of the Tigris and Euphrates rivers, in an area then called Mesopotamia and now part of Iraq. A form of the grass grew in the Euphrates valley as early as 7000 BC. Mention of wheat is made by the Assyrians and Babylonians in stone ruins dating from 3000 BC. The Chinese are recorded as cultivating wheat in 2700 BC and had developed elaborate rituals to honour it.

Today wheat covers more of the earth's surface than any other grain crop and it is the staple grain food for much of the earth's population. Even in areas where there is a long tradition of rice eating, as in North and South East Asia, there is extensive use of wheat flour for making noodles, steamed bread and other foods.

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Marketing Australian Grain

AWB markets wheat to more than 40 different countries – by developing new markets, expanding existing ones and forming key strategic customer alliances.

AWB conducts an extensive range of export promotion and customer service activities to support the marketing of Australian wheat.  The activities aim to maintain and develop trading relationships at various levels. 

An important aspect in promoting Australian sales is via regular face-to-face contact between buyer and seller.  Both sales and technical staff visit our domestic and international customers, ensuring that buyer’s particular quality requirements are clearly understood throughout the organisation.

AWB has captured a 16% share of the world wheat trade, with its major markets in the Middle East and South East Asia.  To service the growing market base, AWB has extended its international presence by expanding offices and staff in Asia and Europe. 

Each year, AWB offers professional development programs to customers, both domestic and offshore, which deal with aspects of milling, noodle manufacturing and grain storage.  These courses assist the customers to meet their desired end result.

During 2002, AWB launched newly branded wheat products into a range of international markets.  By branding products and supporting them with a comprehensive quality program, AWB can build a strong competitive position.

The introduction of the AWB product brand into Indonesia has resulted in a licence agreement with our largest private customer, Bogasari Flour Mills, to identify its customer products into supermarkets with the AWB White Wheat Brand.  AWB continues to look at opportunities to form similar value adding arrangements with other customers around the world.

AWB is firmly committed to an ongoing customer service program, thereby ensuring as far as possible that customers obtain the maximum commercial advantage from milling Australian wheat.

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Wheat - An Australian Pioneer

In Australia, wheat has been grown since the start of settlement by European people 200 years ago. The first crop was sown by convicts at a Government farm on a site now in the heart of the city of Sydney. The farming environment proved too harsh for the new settlers who had to contend with infertile soil, plant diseases, low and unreliable rainfall, lack of farm implements, labour shortages, land clearing and imported seed developed for a different climate. Many people doubted that the struggling colony could ever become self sufficient in food.

From 1830 to 1840 Australia's wheat output increased dramatically with the settlement of Victoria, South Australia and Western Australia. Expansion of production to the inland areas of New South Wales was also an important step. These moves were helped along by the impact of the gold rush, which began in 1850, and later, the construction of inland railways. As a result of this expansion, wheat exports from Australia commenced in 1845 and have continued on a regular annual basis since 1870.

The development of wheat growing in Australia continued in subsequent decades, assisted by the adoption of clover-ley farming, the introduction of mixed farming, the application of fertilisers and improvements in cultivation techniques. The introduction of bulk grain handling systems in the 1930s and 1940s and the widespread use of tractors on farms from the war years onwards were significant factors which helped to bring the industry to where it stands today. Breeding of high yielding, better quality and more disease resistant varieties of wheat and the development of agricultural products to combat weeds, pests and wheat diseases continues to have a major impact.

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Formation of AWB

A major influence on the successful development of the wheat industry over the last 60 years has been the AWB. The Australian Wheat Board was established in as a statutory authority by Wheat Acquisition Regulations in 1939, designed to handle wheat marketing as a war-time emergency, the Australian Wheat Board gave producers an experience of single-desk selling. The commercial strength and stability of this arrangement was widely acknowledged and the role of the wheat board has been maintained.

In 1989, the Government established the Wheat Industry Fund, imposing compulsory levies on wheat sales.  This fund was held and managed by the Australian Wheat Board and by July 1999 was worth approximately $600 million. This money was returned to growers in the form of shares.

On 1 July 1999 AWB became a grower-owned and controlled company under Australian Corporations Law.  In August 2001, AWB listed on the Australian Stock Exchange and continues to be the sole exporter of wheat from Australia and the major seller on the deregulated domestic market. The AWB has also become a major trader of other cereal grains and pulse crops on domestic and export markets.

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Other Grains

A number of other grains have achieved a significant place in Australian agriculture. These include barley, oats, sorghum, rice, field peas, chickpeas, lupins, faba beans and oilseeds.

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Grain in the Australian Economy

By far the largest enterprise in the Australian grain industry is wheat production, with the annual gross value of production averaging about A$4 billion over five years. This amounts to around 90% of the total value of grain production. The balance of around 10% includes barley, oats, sorghum, lupins, rice, field peas, triticale, maize, peanuts, sunflowerseed, soybeans, cottonseed and other oilseeds.

By world standards, Australia is a relatively small producer of grain, with the major cereals, wheat and barley each accounting for around 3% of annual world production. However, as domestic demand is limited due to Australia's small population, about 80% of our wheat and barley is exported. This results in Australia accounting for between 8% and 15% of world trade in each of these grains, and making it one of the four largest exporters with the United States, Canada and the European Union.

For the financial year ending 2002 (1 October 2001 to 30 September 2002),Australian wheat exports were worth about $4.3 million, representing 4% of Australia's total exports.

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