Interesting year for WA's grain industry

31 Dec, 2010 08:49 AM
BROTHERS Michael (left) and Darren Hams, Newdegate, said their crops were only one spring rain away from yielding well. Despite the dry season the two are happy with current wheat prices and are already looking at next year's rotation.
BROTHERS Michael (left) and Darren Hams, Newdegate, said their crops were only one spring rain away from yielding well. Despite the dry season the two are happy with current wheat prices and are already looking at next year's rotation."The season started off well and we were only one spring rain away from having a great year," Michael said.

WITH a sigh of relief WA growers are finishing off the last of their feed crops and cleaning down their headers for another year.

Despite the prospect of enormous crops in Queensland, Victoria, South Australia and NSW this year late rains only confirmed what growers had known for decades - don't count your chickens before they hatch.

The grains industry faced a turbulent year in 2010 and the lack of early rain in WA didn't help.

The long and hindering dry spell in WA was the catalyst for an early "rural crisis" meeting held in Kulin early in the year.

The meeting highlighted that the combination of low rainfall, high input prices and low commodity values had strained access to crop finance and created a bleak outlook for a profitable season.

By August the season was sitting on a knife's edge as whatever rain had fallen earlier in the year began to dry up and record high grain prices following a major Russian export ban teased WA growers.

A further blow came when the Strategic Grain Network Committee's (SGNC) 2009 report into the state and needs of WA's grain transportation system recommended to close about 600km of narrow gauge rail line throughout the Wheatbelt.

In the months that followed a group of 60 farmers gathered on the steps of Parliament House to present a petition to Regional Development Minister Brendon Grylls which condemned the suggestion to close vital lines and keep trucks from competing for road space with cars and school buses.

By the end of September Transport Minister Simon O'Brien had reconvened the SGNC to review the recommendations made in the 2009 report and re-visit the issue of WA's aging Tier 3 rail infrastructure.

In a bid to sweeten the deal it was announced later in the year that the State Government would contribute $178.8 million to WA's rail infrastructure over the next four years.

Mr O'Brien said he wanted to make sure WA farmers could get their financial "lifeblood" to their export customers and investing in a couple of thousand kilometres of rail network would ensure that future - even though Tier 3 lines remained off the agenda.

Grain on rail was undoubtedly the "big issue" for the grains industry in 2010 but significant changes and investments made by the CBH Group didn't go unnoticed.

CBH undertook a major organisational transformation which reduced its senior management team from 12 to seven and cut up to 100 jobs early in the year.

CBH chief executive Dr Andy Crane said the overall aim was to make CBH a competitive business in the deregulated environment and claimed growers could expect to see more competitive storage and handling charges and more money dedicated to capital expenditure at grain delivery sites in the future.

After the Australian Competition and Consumer Commission (ACCC) announced it wanted to introduce more competition for transport along the WA grain supply chain, Dr Crane fulfilled his early promise and announced CBH would invest $175m in its own rolling stock and award its long-term contract to experienced American transport group, Watco Companies.

The announcement had industry groups divided as did the other big topic for the year - the GM debate.

After plant breeding company Monsanto announced it would buy into a partnership with InterGrain the industry was abuzz with mixed reviews.

Some growers feared they would be forced to pay higher charges on End Point Royalties (EPRs) or that farmer to farmer trading would be restricted.

Others were happy to see the new partnership which provided a fresh injection of hope for those contemplating viability when similar tough conditions hit again in the years ahead.

By October farmers had pulled out their headers and the first samples of canola in the Geraldton zone signalled the start of harvest for 2010.

Southern growers were put back a few weeks by intermittent patches of rain but managed to get into their crops, some with higher than expected yields.

Unfortunately for growers like Kojonup farmer Stephen Marsh the burdening dry season and the State's first case of GM contamination proved to be the straw that broke the camel's back.

However, the contamination did put the GM debate and all its discrepancies back in the spotlight and gained the attention of the State Government.

After the rejection of a multi peril crop insurance (MPCI) scheme earlier in the year the State Government also committed to developing new crop insurance models for enterprises affected by the dry.

Although harvest figures were down on previous years WA still looked as if it would receive it's estimated 6.1m tonnes for the 2010/11 season despite early doubts.

Some industry people have said the combination of a dry year in the west and a wet harvest in the east would take away the opportunity for many farmers to play "catch-up" next year.

Nevertheless, some WA growers experienced yields that were higher than initially expected and fortunately global feed grain prices also remained strong toward the end of the year.

2011 will be the year when the world will consistently need good crops to meet global rising demand and restore quality grain stocks to conventional levels.



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