Feed prices ease slightly

22 Jan, 2003 10:00 PM

FEED grain prices in WA had eased slightly in the wake of imported grain arriving to eastern Australia.

A shipment of genetically modified US corn had already arrived in eastern Australia while 150,000-200,000 tonnes of UK wheat was due to have arrived at Graincorp's Newcastle terminal last weekend.

Further shipments of US corn would follow to Newcastle, Brisbane and Melbourne in January and February.

While the UK and US grain, although cheaper than the $370t peak reached by domestic feed grain in eastern Australia late last year, would still be at historically high levels of more than $300t.

Profarmer Australia analyst Dennis Wise said the imported grain to eastern Australia put a ceiling in the market and then, in a round about way, set the market in WA.

He said any grain sent from WA to eastern Australia would have to be landed cheaper than imported grain.

"What's happened is exports have put a lid on things," he said.

"Anything to exit WA has to look at whether it can compete against imported grain and in most circumstances it can't."

Mr Wise said lupins in NSW were bringing $460t while in WA lupins were at about $280t.

However, NSW protocols on anthracnose prevented WA lupins from being imported.

He said WA wheat prices had fallen by about $26t since the highest pool estimates of late October.

Mr Wise said the eastern states market hinged on the harvest of summer cereal crops with some having received good rains but were now quickly running out of moisture.

State and national Stockfeed Manufacturers Association president Ian Spencer said that while feed grain prices had peaked in WA they were still drought-affected high.

WA prices were ranging between $275t-$285t for lupins, $245t-$250t for feed barley and $260t-$265t for general-purpose wheat. It cost about $50t to ship grain to eastern states.

"They have come down to a more reasonable level but were still historically very high," he said.

"There is a bit more confidence of grain being around."

Mr Spencer said that until the eastern Australian summer crops were in head it wouldn't be known if they had received enough moisture. This wouldn't be known until about April.

"We are not out of the woods yet," he said.

He said if the Queensland sorghum crops did not deliver there would be more imports, which would come quicker this time because supply channels had been established.

He said it was hard to judge how much WA grain was used for feed because apart from the compound feed industry, which accounted for about half a million tonnes a year, the large amount of grain traded between farmers was unknown.

Mr Spencer said poultry, pigs, dairy, live export and prime lamb sectors were all users of feed grain in WA.

He did not envisage grain prices rising in the next few months unless there was a continuation of drought conditions.

The importing of grain was a repeat of what happened in the 1994 drought when grain terminals designed for export were adapted to take incoming grain.

Newcastle terminal manager John Sneddon said the imported UK wheat, destined for poultry feed, would be unloaded by grabs into hoppers and then fed into the terminal's conveyor system.

He said tight quarantine restrictions meant the grain would be ground, undergo steam treatment, then be made into pellets to ensure there was no chance of seeds germinating.

It would all be used on the coast and would not go inland.



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