Farm Tender

Absence of rain a concern for Victoria and South Australia

By Angus Groves - AWB


As we progress through the month of May, the absence of rain continues to concern our friends in Victoria and South Australia who are still waiting for their traditional break to the season. It’s not too late for their break in the southern states, but we’re now almost to the end of May so everyone would love to see some rainfall on the nearby forecasts.


The other key talking point is the consistent mice pressure experienced in New South Wales. As the year rolls on there is anecdotal evidence that the mice are pushing further south and are may be resurgent in areas through Northern and Central NSW.


The mice plague is concerning for a number of reasons, including the struggle to establish winter crops due to mice eating the seeds from the ground, and also the damage as they devour freshly emerged shoots. There is strong evidence of mice eating new canola cotyledons through Central NSW, while many farmers opt to re-sow portions of paddocks due to the high price of canola this year. This delay in crop establishment will put the yield prospects back in the affected areas, with favourable spring conditions needed to ensure target yields are achieved.


The second factor that must be considered with the mice plague is the prospect it may continue until the springtime. If mild weather and an abundance of food sources persist until spring, there is every chance that mice could decimate winter crops that are ready to harvest. This would be a cruel blow for grain farmers NSW-wide as they aim to string successive good seasons together following the previous three years of drought.


In terms of pricing in recent weeks, canola continues to remain the standout for the year ahead with prices exceeding $750/mt at Newcastle port. These high prices accompanied with the substantial rainfall in March through NSW has led to a record canola plant Australia wide. Although there have been some headwinds with the mice plague, the run of frosts, and lack of consistent rainfall, canola production is still expected to be a record this year at well over 4 million metric tonnes.


The increase will be largely driven by additional canola acres in Western Australia on the back of Cyclone Seroja that came across the state in April. Since their initial break WA has continued to receive regular rain events, setting the state up for a magnificent production year if conditions remain average from here.


On the wheat marketing front prices reached a high of $325/mt on a Newcastle port basis, but in recent weeks prices have softened by $15-20/mt on some improved weather through the US and Canada. Farmers will be hoping for another good forecast and a change of fortunes on the pricing front before they re-engage with forward selling. They will also be eager to see the backend of the mice plague through NSW, which will remain cause for concern right through the season.