December 12, 2008


Australia rains still delay wheat harvest; quality will worsen


Rainfall continues to dog and delay Australia's annual harvest of winter grains mostly wheat, which will result in further downgrading of grain quality, industry participants said Friday (December 12).


The harvest delays in recent days along Western Australia's south coast and in southern New South Wales follows a wet November in southern Queensland and northern New South Wales that stopped farmers tripping crops there and resulted in huge volumes of the nation's premium quality milling wheat downgraded to livestock feed.


It isn't clear how much wheat will be downgraded - with major loss of revenue for growers - but the calamities this week buttress an estimate by Commonwealth Bank of Australia that up to 2.8 million tonnes of a national wheat crop of 20 million tonnes might suffer downgrading to feed from milling grade due to the poor November weather.


Up to 40 percent of wheat might be downgraded in quality in some areas in northern New South Wales and southern Queensland and a similar percentage in the Great Southern region of Western Australia, the bank said in separate harvest analyses issued Monday.


Rainfall in southern New South Wales of up to 50 millimetres in the 24 hours to early Friday will certainly slow and even stop the harvest and deliveries to GrainCorp Ltd (GNC.AU) storage network, its Corporate Affairs manager David Ginns said by telephone.


"Everything will have ground to a halt with deliveries yesterday quite slow as a result of the rain," he said.


Michael Musgrave, operations manager at Western Australia-based Cooperative Bulk Handling Ltd. said the showers this week, which saw some districts receive up to 120 millimetres of rain over three days, brought the harvest in the south and southeast to a standstill.


CBH has received into its storage network 6.7 million tonnes of the 12 million tonnes total intake it's expecting from the harvest, but the delays now, and the forecast of further rainfall, could push the end of the harvest "well into January and potentially into February," a month later than normal, Musgrave said by telephone.


"No doubt we're going to have downgrades and no doubt there are significant quantities of stock that would have made higher grades" but for rain damage, he said.


The full impact won't be known until the harvest is complete, but while the grain quality of the first half of the harvest exceeded expectations, that will swing the other way for the balance of the harvest, with CBH introducing five new grades to segregate the grain in storage and help capture for growers what quality is there, he said.


However, a grain marketing adviser at MarketAg in Perth, Kim Povey, said some of the rainfall on the south coast was patchy and little damage would be done to crops, particularly if the rain is followed by hot dry weather as expected.


Pretty much all the crops in the area were ripe, so those receiving 120 mm rainfall will almost certainly go to feed, he said.


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