CONCERNS have been raised that farmers in the drought-affected Eastern States may not be able to heavily rely on WA grain and fodder as the summer months near closer, with local and export demand likely to limit supply.
Large amounts of grain have already been transported from WA to New South Wales and Queensland, with the CBH Group shipping about 10 cargo ships each loaded with 35,000 to 40,000 tonnes to Brisbane, Newcastle and Port Kembla between June and early September.
CBH Group general manager of marketing and trading Jason Craig said a substantial amount of last year’s crop had already been sent or was “on the shipping stem to be sent”, with a significant amount of grain from the up-coming harvest also tipped to head east.
“There are projections that between 1.5mt and 2mt of WA’s crop from the 2018-19 harvest will be shipped to areas on the east coast affected by the drought, with similar volumes expected from South Australia,” Mr Craig said.
However, according to Croker Grain general manager Damian Maloney who attended last week’s Grain Industry Association of Western Australia (GIWA) Oat Spring Forum at Narrogin, WA grain could soon head elsewhere.
“The whole east coast market now is getting supported by WA grain so what will have an impact on that for the east coast is if global futures rally and the price in WA is more attractive, we’ll see more grain going from WA to export,” Mr Maloney said.
Mr Maloney said there was a large degree of uncertainty in Eastern States markets as to where demand would sit heading into summer, as it was difficult to gauge how much grain stored on-farm had already been fed out to livestock.
“One of the big unknowns for the east coast is how much grain has gone down a sheep or cow’s throat,” Mr Maloney said.
“A huge thing for us this year will be the on-farm storage vacuum – there is an enormous amount of storage on-farm that is completely empty so there will have to be a lot of grain harvested and stored on-farm before it starts to roll through to the system.”
According to Mr Maloney after initially targeting barley, drought-affected farmers had turned to cheaper grains including wheat and oats and were even purchasing alternative feed options such as cotton seed and almond hull to sustain their livestock.
Milne Feeds ruminant feed sales manager Dean Toovey said pellets were also in high demand heading east.
Mr Toovey said the company had managed to secure a competitive freight rate and was trucking pellets across the country, while also exploring the option of shipping pellets in bulk to Sydney, before transporting them via rail to central NSW.
He said Milne was running at full capacity sending between 1000t and 1500t of its EasyOne and EasyBeef products to Parkes and Dubbo in central NSW each week.
With the live export trade a key market for Milne pellets, Mr Toovey said the recent interruptions to trade meant supplying large quantities to Eastern States customers was possible.
“We’re sending the export pellets we had at the wharf for the live sheep trade over, so with the live export boats going down that’s really freed up capacity,” Mr Toovey said.
“Usually this time of the year is our quietest time – there’s a few people feeding whatever lambs are left in WA but in general this is pretty quiet.
“We normally do quite a bit to the north of WA now, but that’s fairly quiet as well at this stage.”
However, Mr Toovey said Milne was unlikely to continue sending large quantities of pellets to NSW, with local demand set to increase as the WA season dried off in the next couple of months.
He said the company had to prioritise its local customers at the expense of its Eastern States’ counterparts.
“Those in the north of WA are mustering and that will start picking up in the next month or so and we start really ramping up domestically in WA at about Christmas,” Mr Toovey said.
“It’s not now that they (Eastern States farmers) are going to have problems, it will be in three months – in November and December – when they’ve fed them for a year and a half then and they’ve got to do it again.
“It will depend on how hard the finish is here; if it’s a soft finish we can send pellets over there longer and if it’s a hard finish local demand will start ramping up pretty quickly
“We’re all just sending as much as we can at the moment while capacity allows here.”