The 2017/18 season was a mixed bag for many grain growers with wheat and barley performing better than expected due to a late season turnaround, and the high expectations following last year’s pulse demand dashed due to global over-production.
Barley yields average
Despite early season concerns Australian barley production was around 8mmt (USDA), close to the five-year average if last year’s bumper crop was excluded.
A major trend in 2017/18 was the move to new barley varieties.
“In Western Australia we saw a large increase in Spartacus, with relatively stable acres of La Trobe and continuing declines in Bass, Scope, Hindmarsh and Baudin,” said Lyndon Asser, International Marketing Manager for Glencore Agriculture.
Lyndon said while the season did not initially show great promise, it finished positively – largely aided by late rain and a cool spring. These conditions led to an above average percentage of tonnes meeting malting grade specifications.
In South Australia the greater proportion of the crop comprised Scope and Compass, with steep declines in Hindmarsh plantings. There was also evidence of expanding plantings of Spartacus and Planet.
“SA’s season had a little bit of everything: a dry start, followed by a promising winter and then a relatively poor spring period. However, by most accounts, the grain yield and quality was higher than generally expected,” Lyndon said.
Plantings of the common malting barley varieties of Scope, Compass and La Trobe all remained stable in Victoria, while acres sown to Hindmarsh continued to decline. Spartacus proved increasingly popular as growers began their bulking up process.
“The season held good prospects for much of the period but turned very challenging in the lead up to, and during harvest, when many areas experienced unseasonably late frosts compounded by harvest rain,” Lyndon said.
“In terms of yield, most areas came in around average – with Mallee being the top-performing region.”
Extremely challenging dry conditions in the northern areas of New South Wales led to a well below average result for barley producers.
“It is difficult to make too many comments about variety movements, given many acres were not sown or plans were changed based on the unfavourable conditions,” Lyndon said.
“In the southern cropping areas of NSW, which didn’t fare much better this season than their northern neighbours, La Trobe and Hindmarsh remained the dominant varieties, with many growers also planting small quantities of Spartacus.”
Overseas markets
China remains Australia’s key barley export focus, along with other target markets in South East Asia and the domestic market where possible.
“We have received a good reaction from international maltsters to Spartacus and Planet,” Lyndon said. “In South Australia we ran a couple of small segregations for Spartacus which will enable us to give Chinese maltsters the opportunity to look at batch size volumes.
“In terms of Planet, growers are only at the seed bulk up stage – but anecdotal results from this season suggest it stood up pretty well.
“We also saw a greater uptake of trial amounts of Compass, with end-user comments being quite favourable.”
Wheat performs well
Wheat performed better than expected during the 2017/18 season.
According to Simon Gellert, Senior Wheat Trade for Glencore Agriculture, yield and quality were good given the growing season.
“It has been a slow start to the Australian marketing campaign with pressure coming from our overseas competitors,” Simon said.
“The Russian wheat harvest in particular was exceptional and large production volumes will mean sustained supply pressure as the country looks to minimise stocks carried over into the 2018/19 marketing season.”
On the ground: A challenging year
A lack of autumn rainfall made 2017/18 a challenging year for Darren Morrell who runs a mixed grain farm on the central wheat belt of Western Australia.
Darren grows wheat (Scepter and Chief), barley (Bass, Spartacus and Planet), canola (GM – 43Y23, 404, 44Y27; non-GM Bonito) and lupins (Jurien) on his property in the shire of Cunderdin with wife, three sons and his parents.
“Our growing season started with no rainfall in April, 8.5mm in May (after six rainfall events) and 13mm in June after four rainfall events,” he said.
“It was very difficult to establish crops, which was frustrating as we had 200mm in February and March so there was a lot of subsoil moisture available.
“The challenge was getting the crops up to survive the dry spell.”
Darren said lots of canola, especially on heavy country, didn’t germinate until the July rains.
“Fortunately, we had a very cool, wet finish which helped the crops immensely. We ended up with above average wheat, barley and lupin yields, but canola was well below average. I think this was similar for most farmers in the district.”
Darren said the season had some lessons in it, however.
“In future, we’ll need to keep deep ripping – and to deeper zones. We’ll also continue with spading, as returns are still giving good dividends,” he said.
“It was again reinforced that there is no substitute for organic nitrogen compared to bagged nitrogen. Yields and protein were far superior following pastures and lupins.”
Pulse market plunges
After an exceptional production year in 2016/17, many export markets had carry over stocks coming into the 2017/18 season.
According to Mostyn Gregg, Glencore Agriculture Pulses Trader, pulse markets are currently very price and quality sensitive.
“We’ve seen over supply and tepid demand, and because markets are sensitive to supply shocks, it has led to high volatility in price,” he said.
Mostyn said last season’s record crop coupled with this season’s increased plantings had led to the current poor pricing situation.
“At the moment we’re seeing the lowest prices in recent history on all pulse commodities,” he said.
“New suppliers are emerging from the Black Sea (Kazakhstan) and large crops in Canada, Russia and Argentina, along with the expectation of a bumper crop in India will impact on demand.
“The Indian government has a mandate to produce affordable pulse prices for the consumer, but has a conflicting problem of supporting prices for the grower.
“This dual mandate of low prices for consumer and high prices for growers leads to interventionist policies, evidenced by the introduction of volume-based quotas and onerous tariffs.”
Mostyn said the most politically sensitive issue in India currently is food security with the Indian government committed to self-sufficiency.
“While the chickpea tariff has gained the most media attention, the first tariff of 30 per cent on mung beans was brought into effect mid-2017,” Mostyn said.
“The mung bean tariff was followed by a 50 per cent tariff on peas – aimed mainly at Canada and Europe – but it also affected Australian products.
“Right at the height of the Australian exporting season (December 2017), India then introduced the 30 per cent tariff on chickpeas and lentils.
“India is one of the largest markets for Australian pulses and these tariffs have sent shockwaves through all pulse destination markets.”