Rain impact across WA, NSW, SA and VIC not clear yet

Did the Australian wheat crop get bigger again with the recent rains or did it just stop getting smaller?

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A lot of the wheatbelt has now had an October rain, although with storms predominating in some regions, the falls hit some farms and not others.

It is easy to assume that tonnage has been recovered, but that might depend on how the production forecasts at the start of October were being generated. If those forecasts were based on getting average October rainfall, maybe tonnage has simply been saved, rather than new tonnes added to the production outlook.

Certainly, there are some crops in NSW and Vic that will now be harvested.  Growers are reporting that they may now harvest 25 to 30 per cent of their crop area, compared to nil before the rains.

At the same time though, wheat crops were still being cut for hay in parts of SA last week. Hay cutting is now confined to the later areas of the state, where grain yields tend to be higher, but where hay is always a viable alternative, particularly this year when supplies for the export hay market are tight.

The size of the Australian crop will remain questionable until we get a fair bit of the crop in the bin. The impact of drought, frost and late rains has left us a mix which is hard to project a final outcome from.

While some are still suggesting that the USDA forecast for an 18.5 million tonne wheat crop is still ambitious, it is hard to see them changing that number until we get concrete evidence of what has been harvested.

How large Australian exports will be is also a discussion point. On paper we should only be able to export about 10.5mt from and 18.5mt crop. The official July to June numbers will be higher than that though, because of exports since July 1 this year which are obviously made up of grain from last harvest.

We are also likely to see early shipments of new season grain from WA and SA, so that for a while the pace of our exports won’t reflect the drop in production for this year.

In fact the slowdown in exports from Australia won’t really hit until mid 2019, and by then the global market will be on the cusp of new exportable supplies from the 2019 northern hemisphere harvest. It could well be that the small crop from Australia this year causes barely a ripple in the global market if exportable supplies from elsewhere cover the shortfall from us in the second half of 2019.

Meanwhile, CBOT futures continue to trade within a range that began in mid September. In $A terms we have not been above $A272 a tonne since August. Although prices have not broken to the upside, at least the last two lows have been higher than the previous low.

The real problem seems to be that there is not enough news to keep feeding the bulls, particularly in terms of demand for US wheat. Until we can break to the upside, the risk remains that the market will eventually fail, and push down to the seasonal lows set in September, or the contract lows set in July.

Source: Stock and Land @ 2018-10

QLD dairy farmers back royal commission into milk pricing

QUEENSLAND dairy farmers have backed National Party calls for a Royal Commission into the practices of supermarkets over milk pricing.

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Queensland Dairyfarmers’ Organisation vice president Matt Trace said the supermarkets had had a crippling effect on the dairy industry for the past eight years.

“It is time for this to be fixed,” Mr Trace said. “Although supermarkets have responded in part to the QDO calls for a 10c drought levy they have not gone far enough.

“It is still unclear if any of the money collected by Coles will go to the farmers who supplied that milk.”

Mr Trace said farmers expected that a royal Commission into supermarkets will shed light on the practices of supermarkets against their suppliers and solve the retail problem of the dairy industry once and for all,” said QDO Vice President Matt Trace.

“We applaud Llew O’Brien (LNP Wide Bay) for leading this call supported by his federal colleagues,” he said.

LNP Opposition Agriculture Tony Perrett said it was time Queenslanders received answers.

“Enough is enough,” Mr Perrett said. “It is time for a royal commission into how the supermarket giants are milking the system and squeezing our dairy farmers.

“What we have seen happen to Queensland’s dairy industry is a national disgrace and it’s time to find out who is responsible.

“It’s time for these supermarket ‘bastards’ to come out from behind their glossy spin doctors and face the tough questions.

“The public and our farmers deserve answers on how the race for corporate profits through the $1/litre milk price has forced out 75 per cent of Queensland’s dairy farmers in the last 18 years – from more than 1500 to just 386 dairy farms in the state.

“In Queensland a dairy farmer is leaving the industry approximately every five to seven days due to the behaviour of the supermarkets.

“Let’s be very clear, our dairy farmers are not shutting down because of a drop in demand. Queenslanders drink 84 litres of fresh white milk per person per year – they are closing because they are getting as much for their milk now as they were in 1992.”

Mr Perrett said the Queensland Dairyfarmers’ Organisation had led a proactive campaign for a very reasonable 10c per litre drought milk levy.

“But all the supermarkets served up in reply to public pressure were half-baked measures to plug their own already unfairly price home brand products,” he said.

“Buying supermarket private label milk, even packaged with the drought levy, is worth less to dairy farmers than branded milk.

“Clearly public and political pressure are not enough. Year after year the supermarkets have not budged – but that time is now over.

“The Queensland Liberal National Party completely support a royal commission into the major supermarkets and finally getting answers from those responsible for this mess.”

Source: Farmonline 2018-10

New criteria to benefit basin communities

Victoria and New South Wales release agreed socio-economic criteria to determine the requirements for any further water recovery under the Murray Darling Basin Plan.

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The Andrews Labor Government has consistently said that Victoria will only support extra water recovery above the Plan’s 2,750GL target if it can be achieved without negatively impacting farmers and Basin communities.

The criteria are designed to ensure that any new projects that could contribute to additional water recovery must have neutral or positive socio-economic outcomes for Basin communities.

The criteria below agreed by the two states, requires project applications to be public and that any project:

  • Identifies potential impacts on the district and explains any benefits.
  • Does not directly increase the price of water.
  • Contributes to the current and future financial viability of irrigation districts.
  • Supports regional economies by not impacting on irrigation jobs now and in the future.
  • Does not have negative third-party impacts on the irrigation system, water market or communities.
  • Is supported by the community.
  • Identifies and improves social and environmental outcomes and does not negatively impact them.
  • Identifies, protects and improves Aboriginal values.

At the last Ministerial Council, the Labor Government secured agreement that there would be no on-farm water recovery projects in Victoria under the Federal Government’s current water recovery program until the criteria was developed.

Victoria is already on track to deliver on its commitments under the Basin Plan and has prioritised investment in water recovery projects to meet its target of recovering 1,075GL of the overall Basin target of 2,750GL.

The Labor Government is calling on the Commonwealth to fund Victoria’s 650GL of projects which will recover water and deliver environmental benefits to the Basin without impacting communities.

The Government is supporting irrigation communities by modernising, building and replacing irrigation infrastructure, reducing water losses and re-setting the Connections Project.

The Government is now seeking community feedback on the criteria, which will be discussed at the next Murray Darling Basin Ministerial Council in December. To comment on the criteria head to water.vic.gov.au.

Quotes attributable to Minister for Water Lisa Neville

“We’re ensuring any projects that seek to take further water away from our irrigation communities have a clear and transparent set of criteria to ensure that they do not negatively impact on Victorians.”

“Victorian irrigators have already done much of the heavy lifting when it comes to water recovery and we will not allow new projects to impact our regional communities, jobs and families they support.”

“We remain focused on meeting our commitments under the Basin Plan in a way that minimises the impacts to Victorian communities and benefits the environment.”

 Source: Delivering for All Victorians 2018-10

Water storage levels reveal “harsh new reality” of climate change

When it comes to national water storage levels, some parts of Australia could be facing major water restrictions sooner than they think due to the effects of climate change.

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“If we look at the water storage levels in Australia in October 2018, we can clearly see who is winning and losing,” said WaterGroup Managing Director Guenter Hauber-Davidson.

Hauber-Davidson, who has worked with water authorities across Australia to help reduce water loss for more than two decades, shared his insights into the current state of water storage across Australia’s metropolitan dams.

“Canberra hasn’t lost quite as much water as our politicians have lost credibility, but levels have been going down enough to take notice,” he said.

“Well done to Perth, which has 15% more water in its dams than last year. It shouldn’t rest too easy though – we all know how quickly things can change.”

Hauber-Davidson said Brisbane is the only other capital city with increased levels, up 5%, while Melbourne and Hobart are trending downwards. Darwin remains relatively unchanged.

“Sydney and Adelaide have experienced a whopping 25% fall in 12 months,” he said.

“At this rate, without substantial rain, they could be running on empty in under three years.”

What does this tell us?

Hauber-Davidson said the figures show the water industry needs to start planning for the impacts of a changing climate.

“Climate change is upon us. The sooner we stop listening to any of those stubborn alt-right climate change deniers and get on with dealing with the harsh new reality, the better,” he said.

“The new reality is that all the predictions are coming true; more frequent and severe droughts are coming.”

What can we do about it? 

Hauber-Davidson suggested the following:

  • Accept that water will get scarcer and thus more expensive.
  • Better manage water, with a focus on efficiency.
  • Take a serious look at the current rules and regulations governing the use of alternative water sources, whether that’s rain or stormwater, grey or black water, or any other form of recycled water.
  • “The current set-up is too restrictive, over the top and not economically viable,” he said
  • Invest in metering and monitoring. “We cannot keep using an archaic system where such a precious resource is measured just once every three months. We need at least daily snapshots of what is happening in our homes, factories, schools, offices and institutions – and the networks.”
  • Monitor more regularly. “We can no longer accept that losing 10% of precious drinking water in our pipe distribution networks is normal, just as we can longer allow high abnormal use – including leaks in buildings – to run undetected for months,” Hauber-Davidson said. “Online monitoring using disruptive, low-cost IoT technology could do away with all of that.”

Source: Australian Water Association 2018-10

Graziers in far-west NSW digging deeper into debt, and dams, to get out of drought

Graziers in far-west New South Wales are using government loans to prepare their properties for the arrival of rain.

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It may seem counterintuitive to focus on water storage in the middle of a drought, but that is exactly what Richard Wilson, from Yalda Downs station, is doing.

As he quite sensibly explains, “the only time you can clean a dam is when there’s no water in it”.

The Wilsons have taken advantage of the State Government’s low-interest Farm Innovation Fund loan to improve their property’s water efficiency so when it does rain, their land will stay greener for longer.

Having completely destocked, they have decided to forfeit short-term profits from selling wool and mutton to make a long-term investment.

“To de-silt a dam like this has taken eight days and cost roughly $25,000. It’s a big investment, but long-term it’s a very sound investment,” Mr Wilson said.

He is calling on the Federal and State Governments to add water-specific projects like his to the collection of drought assistance loans.

Improving property for this drought and the next

Michelle and Jim O’Connor, who live on Milpa Station near Packsaddle, have also taken advantage of the fixed interest-rate Farm Innovation Fund to improve their property’s water storage capacity and reticulation.

The O’Connors said the infrastructure projects they had undertaken had used the loans up in their entirety.

“We put in a pipeline between two bores, and that’s exactly how much it cost,” Ms O’Connor said.

“The bore we sunk the other day cost $88,000 … so by the time you do five of those, and you equip them with a pump and solar panels, it uses the loan up pretty quick.”

The O’Connors said while there did not necessarily need to be more drought assistance loans, there should be better promotion of what graziers could achieve with existing funds.

“I don’t think there’s enough promotion of the Farm Innovation Fund, for example, which you can access anytime, not just in drought,” Ms O’Connor said.

“By the time people realise what they can do with the money, it’s often too late to help with the current drought … but I suppose it’ll help with the next one.”

Managing debt during drought

A common thread for both grazing families is a desire not to borrow more money than they can conceivably repay once the drought breaks.

“Because we sold off stock, we’ve got money for the rest of this year,” Ms O’Connor said.

“We also have money in farm management deposits, which I’m trying not to spend because come next year we won’t make much money in wool and mutton.”

She estimates the decision to reduce livestock numbers will cost the family millions.

Like the Wilsons, the O’Connors view the short-term sacrifice as an investment for the future.

“Our sons will continue on the land, so we’ll do anything to make life a bit better for them in the future,” Mr O’Connor said.

The O’Connors have improved water infrastructure on their property by putting down five bores this year, installing a 22km pipeline to improve water distribution, and installing a desalination plant to process salty bore water.

A bold move?

Mr Wilson said his family was in the minority of grazing families who had decided to use government assistance loans to improve their property rather than keep their stock alive.

“It can be a lot harder for other people who have been breeding stock for generations,” he said.

“We made this decision last April when it looked like it wasn’t going to rain, so this is a calculated risk for us.”

Mr Wilson said the investment in water storage and reticulation would safeguard Yalda Downs from the next drought.

With droughts forecast to be more frequent and severe in the future, water-optimising projects such as these could be the key to keeping graziers afloat and government loans at bay for longer.

While the Wilsons and O’Connors are hoping rain comes soon, they are content with the knowledge they will be better prepared for when drought next strikes. 

Source: ABC Rural 2018-10

Survey highlights impact of drought

A survey of Queensland farmers has revealed about half had lost more than half their annual income due to drought and about 60 per cent had less than half their potential water supply.

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Releasing the results of its 2018 drought survey today, AgForce Queensland renewed its calls for immediate, additional support for drought-affected communities doing it tough and an overhaul of national drought policy to deliver better long-term outcomes.

AgForce General President Grant Maudsley, who will attend tomorrow’s national drought summit in Canberra, said the prolonged and severe nature of the drought had taken an enormous financial, emotional and environmental toll on many regional communities in Queensland.

“This survey lays bare the impact of the drought with the vast majority of Queensland’s cattle and sheep producers running much lower livestock numbers and results indicate almost a quarter of the state’s grain growers not planting a crop at all this year,” he said.

“The survey also highlighted the resilience of farmers in the face of adversity. While almost half of those surveyed rated the financial and personal impacts of this drought as worse than previous droughts, about two-thirds were optimistic about the long-term outlook for their businesses.”

More than 430 primary producers from 49 local government areas responded to the AgForce 2018 drought survey, which was open throughout late September and early October.

Key results include:

  • 5 per cent of cattle and sheep producers were running less than three quarters their usual livestock numbers;
  • Half of those surveyed had lost up to half their annual income with only seven per cent reporting no change to their income as a result of drought;
  • Almost half those surveyed held and used Farm Management Deposits;
  • More than half are concerned about the lack of rain and the cost and supply of seeds, feed and stock;
  • About 60 per cent had less than half of their potential water supply and about 10 per cent reported having no surface water remaining;
  • About 42 per cent of those surveyed found the fodder and water freight subsidies available through the Queensland Government’s Drought Relief Assistance Scheme useful in managing drought.

Mr Maudsley said the results highlighted that primary producers needed both immediate support to help them through this tough time and long- term policy certainty to promote better planning and risk management.

“The ongoing nature of this drought has overwhelmed even the best efforts of many producers to prepare,” he said.

“AgForce believes Queensland and Australia needs an enduring drought policy and have proposed an ‘Agricultural Business Cycle’ approach to help move governments from mainly responding in crisis and to empower producers to continually better manage the impacts of climate risks across their business.”

Key measures surveyed farmers identified that would help them through this drought, during recovery and to prepare for future drought events included:

  • Relief from council rates and leasehold land rent;
  • Subsidies for fuel, freight and fertiliser;
  • On-farm water investment scheme, including desilting of dams and to build water storages;
  • Pest and weed management grants;
  • Evaluation tools for land, climate, water and weather.

“Drought has such a big impact on Australian agriculture and extended dry periods are a recurring feature, so we need governments at all levels and politicians on all sides to come together with industry to work on a sustainable approach to manage this issue now and into the future,” Mr Maudsley said.

Source: Rural Weekly 2018-10

New $5 billion future drought fund to help farmers battle changing climates

Helping farmers prepare for future droughts will be the focus of a new multi-billion-dollar fund that Prime Minister Scott Morrison will unveil today.

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The $5-billion Future Drought Fund will be announced at a national drought summit, which brings together state and federal governments, weather experts, farm lobbyists and charities, in Canberra.

Key points:

  • The Federal Government will commit an initial $3.9 billion to the fund, with $100 million to be available each year from 2020
  • Money will be provided for community services, research, technology and infrastructure
  • Legislation to create the fund will need to pass Parliament

The Federal Government will initially commit $3.9 billion to the fund, which will reach $5 billion by 2028.

But only $100 million will be available each year from 2020, with that money being allocated by a board of guardians.

“This funding will support farmers and their local communities when it’s not raining,” Prime Minister Scott Morrison said. “It guarantees drought support for the men and women who drive our nation.”

Legislation to create the fund will have to pass the Parliament before it can be created.

Provided that happens, the interest gathered from the fund will go towards water infrastructure and drought resilience projects.

The focus will be on farmers, non-government organisations and communities to future-proof themselves to better handle droughts.

Money will be for community services, research, adoption of technology and infrastructure that supports long-term sustainability.

Money for the drought fund, which is modelled on the Medical Research Future Fund, will come from the Building Australia Fund, which has sat dormant since the 2014-15 financial year.

With a focus on future-proofing, it means the fund will sit separate to existing projects and funding that helps farmers when they are in drought.

“The challenges of drought vary from farm to farm, district to district, town to town and we continually need to adapt and build capacity,” Mr Morrison said.

Farmers hoping for firm policies

The drought summit comes as the commodity forecaster ABARES yesterday warned unfavourable seasonal conditions would further slash expected grain yields.

The summit will include presentations from the Bureau of Meteorology, ABARES, drought co-ordinator Major General Stephen Day, and drought envoy Barnaby Joyce.

The National Farmers’ Federation has demanded the summit be more than a talk-fest and instead offer concrete policies to support farmers.

It wants a new drought agreement between the federal and state governments, better risk management tools for farmers, and improvements to farmer support payments.

It also wants transport and infrastructure upgrades in regional communities that battle drought.

Opposition critical of drought forum

Opposition agriculture spokesman Joel Fitzgibbon has questioned whether the summit will be worthwhile.

Speaking ahead of the announcement on the multi-billion-dollar drought fund, he criticised the Government for piling such a large number of stakeholders into a short meeting.

“We’ve got two hours for 170 people to discuss long-term planning. It ain’t going to happen, sadly.”

Mr Fitzgibbon maintains the Government should have done more for communities that have been in entrenched drought for years.

“It’s somewhat extraordinary,” he said. “We are in our seventh year of drought, this Government is now in its sixth year in office, and yet we’re having a drought summit to talk about drought.”

The National Farmers Federation came into these talks with a wish list of measures it wanted the Government to take up.

“Five billion dollars is no mean feat. It’s a significant amount of funding,” NFF president Fiona Simson said.

“Obviously we’ll be interested in some of the detail about what that money is to be spent on, what sort of programs will be supported.”

She said at first glance she was happy with the Government’s approach.

Gunnedah sheep and cattle farmer Chris Mammen is among those living on the land who are hoping that the Government’s policies help in the long term, and move beyond emergency payments.

“The drought policy doesn’t seem to match that versatility that most farmers try to strive for I guess,” he said.

“[It’s] like putting a round ball in a square hole sometimes.”

Source: ABC Rural 2018-10

Sources include: ABC Rural, The Land, The Weekly Times, Stock and Land, Stock Journal, Bloomberg, Farm Online, Queensland Country Life

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