October 30, 2006

 

Australia imports grain to save livestock

 

 

Emergency supplies of grain would be imported to feed drought-stricken stock, as forecasts for Australia's winter crops and livestock have been  slashed by US$6.2 billion, according to local media.

 

The severe downturn could knock 0.7 percent off Australia's economic growth. The government's commodities forecaster yesterday issued its third downgrade of crop estimates in seven months.

 

The Australian Bureau of Agricultural and Rural Economics predicted the smallest wheat crop in more than a decade, with even barley and canola crops registering a decline, severely affecting grazing stock.

 

The gross value of beef cattle production was forecast to fall by 13 percent to US$6.6 billion.

 

The government was considering potential sources of imported grain after receiving 40 applications from commercial operators to buy grain to feed stock, said  agriculture minister Peter McGauran.

 

Though the full impact of the expected dry weather on summer crops was not yet known, the country's imports might have to start as early as January to cope with shortages, he said.

 

ABARE's drought update predicted farm production in 2006-07 would be 35 percent, or US$6.2 billion, lower than the previous year.

 

The last drought, in 2002-03, was estimated by the Australian Bureau of Statistics to have shaved 1-percentage point from economic growth.

 

Though the ABARE forecast for wheat stood at 16.4 million tonnes last month, it recently fell  61 percent below the 2005-06 crop, to 9.55 million tonnes. The combined wheat, barley and canola crops would struggle to make 13.55 million tonnes, the smallest yield since the 12.1 million tonnes during the 1994-95 drought and 1 million tonnes less than the 2002-03 drought.

 

Still, growers might achieve relatively better production outcomes owing to improved management practices, like direct drilling of seed when sowing, and the development of improved grain varieties since 1982-83.

 

Farmers have however, been forced to reduce stock numbers due to poor pasture growth and increasing prices for feed grains.

 

Many farmers would have "zero farm income and no cash flow" this year, said deputy prime minister Mark Vaile while assuring the government would "continue to stand by primary producers" with drought relief, extended massively in the past month.