April 29, 2011

Australian farmers wrestle to cash in on superior wheat prices

Western Australian farmers intending to capitalise on a massive increase in the prices of wheat might experience difficulty due to the recent spell of unfavourable weather.

Prices have risen by about AUD30 (US$32.72) a tonne over the past month, due to dry conditions in parts of the Northern Hemisphere's cropping regions.

Richard Vincent, the director of independent commodity advisers Market AG, said many farmers may struggle to fund a larger cropping programme this year.

"I think farmers are trying to get back or recover some of the bad times they have had in the last couple of years, so there is a major constraint in terms of access to money and how much risk a business can take on in growing a crop.

"That is probably the major constraint, if there is no credit hurdles there, no doubt farmers will be sowing more wheat to capitalise on this opportunity."