Grain growers face weather and global market challenges

By Angus Groves

31st May, 2023 

 

The NSW grain industry, a key player in our state's agriculture, is navigating some rough waters. Changes in weather patterns and potential shifts in the global market are making things tricky for farmers across the state. Despite these hurdles, there's some good news on the horizon - we might see a bit of much-needed rain on the east coast soon.

Our farmers have had to deal with prolonged dry weather this year, making it hard for planted crops to germinate and establish effectively. In the north of NSW, the crops have had uneven growth due to the changing temperatures and lack of water.

Rain has been a bit of a rare commodity lately. The Australian Bureau of Meteorology is expecting below-average rainfall across most of NSW. However, they're also saying there might be some rain heading for much of the east coast this weekend. If we get that rain, it would be a big help for these crops struggling to germinate.

The last three months have been marked by fluctuations in northern hemisphere wheat prices, driven by factors such as supply and demand imbalances, weather-related concerns, trade developments, and policy shifts. Understanding these dynamics is crucial for stakeholders in NSW's wheat industry to navigate market conditions and seize opportunities presented by changing global wheat prices.

On a global scale, there's another challenge on the way. The northern hemisphere is getting ready to harvest their grain as their summer begins. When their grain hits the market, we could see grain prices drop. Our farmers will need to be ready to adjust to any changes in prices or trading trends.

More recently the approval of the Russia and Ukraine grain corridor extension two weeks ago not only creates concerns over downward pressure on prices but also opens up potential opportunities for Australian grain into the Asian market. With grain now flowing freely from these major exporting countries, it may lead to shifts in global trade dynamics. Australian grain producers can seize this opportunity to increase their market share in Asia, leveraging their reputation as high-quality, reliable exporters. By offering competitive prices and maintaining our clean-green quality, Australian grain can position itself favourably in the Asian market, offsetting potential price pressures in other regions.

This must be of course balanced with the unfavourable weather outlook here in Australia, with such a large domestic market at home, we must remember that the smaller our crop becomes, the more of that it will be consumed here on our shores. This will see Australian basis become stronger if the dry does in fact continue throughout the year.

The coming months will be a test for the NSW grain industry. But even with the challenges, there's still reason to be hopeful. If we get the forecasted rain, it could bring some much-needed relief. Our farmers have always been good at dealing with change and tough times, and their resilience will be key in tackling the coming challenges.