November 8, 2010

 

Australian state predicts US$3-billion record grain crop

South Australia's Official State Government estimated Thursday (Nov 4) a significant crop size upgrade to a record 9.62 million tonnes, well above its 7.25 million tonne estimate in early September, amounting to nearly US$3 billion.

 

A large crop was welcomed yesterday because a successful grain crop has the greatest potential of all to provide a short-term economic stimulus to the state economy.

 

The harvest started last week in the Port Pirie and Crystal Brook areas with the main harvest running about two weeks late and is not expected to get underway seriously until mid-November.

 

South Australian Farmers Federation president Peter White said a large crop would rescue some farmers from financial ruin. "Not too many farmers have made a profit growing grain since 2004 due to low prices and drought," he said.

 

Mr White said the amount of debt in farming businesses was very high and this year wouldn't solve the problem, but would help them get back on their feet.

 

Analysts yesterday estimated that a 9.62 million tonne grain crop would be worth about US$3 billion to the state, based on current commodity prices.

 

Premier Mike Rann welcomed the large crop which he said would stimulate regional economies and boost exports. "Our farmers have been blessed with good growing conditions in recent months,'' Mr Rann said.

 

Rural Directions director Chris Heinjus warned the crop was not in the bag yet and would require freedom from bad weather, mice, locusts and disease through to the end of harvest.

 

Mr Heinjus said many farmers were nervous about successfully harvesting the record crop, with long-range forecasts for wet conditions through to December.

 

Callum Downs Commodity News analyst Malcolm Bartholomaeus said there was an increased risk of rain during harvest because of the La Nina weather pattern this year.

 

But grain downgraded to stock feed would receive the same price as premium wheat last year because of high global demand.

 

Viterra Inc's executive manager grains Dean McQueen said the company was doing everything possible to prepare its storage and handling network for this year's record crop, but warned there would be pressure on some parts of the system.