Normally, I’d relegate news about Australia’s agricultural output to Links, but I thought this sighting was worth elevating to a post in light of Lambert’s discussion of the Jackpot and California’s fires yesterday. As you’ll see, the fall in Australia’s new grain deliveries is dramatic.
Even when I lived in Australia from 2002 to 2004, policymakers were discussing that Australia was not getting enough for the water it was selling via agricultural exports, although nothing was done to address that issue. And after I left, Australia liberalized immigration to increase its population, which then was around 20 million. It is now over 24 million. The argument for continuing to restrict immigration was scarcity of water, that it was already a resource under strain and more people would only make things worse.
The West Australian gave a similar grim picture last month with Australia to deliver smallest crop in a decade:
Rabobank is forecasting 3.7 million tonnes of WA grain will head from west to east by truck, train and ship this harvest, because of the Eastern States drought.
The call, part of Rabobank’sAustralian 2018/19 Winter Crop Production Outlook, comes as Australia gets set to deliver its smallest winter grain crop in more than a decade, severely curtailing export volumes and weakening the nation’s position against competitors.
Rabobank is forecasting national harvest of just 29.3 million tonnes, down 23 per cent on last year.
With WA forecast to deliver 15 million tonnes (the only state with increases, being 3 per cent up on last year), the state will for the first time in 20 years contribute more than half of the national winter crop.
Rabobank said were it not for the better harvest prospects in WA, the country would be facing its lowest winter crop in the past 20 years.
The reduced harvest – combined with strong local demand and prices – also has significant implications for Australia’s export markets, with grains exports to be severely curtailed.
HORROR receival figures into the GrainCorp storage network highlight the depth of the drought in Australia’s north-eastern cropping zone.
Total new-crop grain receivals into the GrainCorp bulk handling network as of November 5 totaled just 93,300 tonnes, with Victorian deliveries, traditionally not a major factor until December, making up over a quarter of the tally.
And industry figures expect the sparse level of deliveries to continue, estimating that GrainCorp could expect to see just 30 per cent of the well below average east coast winter crop in its system given the strong domestic market this season.
The entire cropping zones of Queensland and NSW together have contributed just 67,800 tonnes into GrainCorp storages for the year.
Even this lowly total is a step up from last week’s figures, when there was just 22,000 tonnes across the two massive grain producing states, which normally put millions of tonnes into the system before the Victorian harvest is ripe.
In comparison, at this time last year, even allowing for a drought impacted season, there was 717,000 delivered to GrainCorp’s networks and in 2016, in spite of massive rain delays, there had been 1.2 million tonnes delivered.
This puts total deliveries this year at 7.5pc of receivals to the same time of year in 2016 or 13pc of those in 2017.
The shortage of cereals hitting the system is borne out by the fact a significant proportion of the grain hitting the GrainCorp system has been chickpeas from central Queensland.
GrainCorp is bracing itself for limited deliveries of whatever grain there is this season.Export volumes will crash and hit net exports, one of the few key positives for GDP going forward.