March 4, 2004

Increasing Livestock Consumption Drives Australian Feed Grain Demand

The increasing consumption of livestock in developing countries will be the predominant reason for substantial increases in demand for feed grain. Dr. Ray Johnson, General Manager of Ridley AgriProducts, told participants of Australian Bureau of Agricultural and Resource Economics' (ABARE) Outlook Conference this week that increasing use of cereal grains for livestock production in Australia required programs to improve the availability of feed grains.

In other sectors, Dr. Rohan Nelson, Principal Economist with ABARE said following an expected near record crop in 2003-04, the incomes of Australian grain growers in 2004-05 are expected to come under pressure from the recent appreciation of the Australian dollar. Over the medium term, Nelson predicted that cropping would continue to dominate Australian agriculture, with some shift toward wool and lamb production over the next five years.

Malcolm Bartholomaeus of Callum Downs Commodity News told the conference that last harvest, growers had over 40 ways to market or price every individual load of APW wheat. However, Bartholomaeus told the conference that "many of the pricing products which offer little value to growers should fade away over time."

Tony Day from Cargill told conference delegates that the outlook for oilseeds was positive. Day told the conference that the South American soybean industry will continue to grow. "In South America, soybeans are a low investment crop, present the best gross margin for producers and land is available and is relatively inexpensive versus North America," he said.