No push for assistance for wheat growers

07 Jul, 2016 02:00 AM
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Australian grain farmers will not be pushing for government assistance to help them manage current low wheat prices.
Australian grain farmers will not be pushing for government assistance to help them manage current low wheat prices.

THE CHAIRMAN of one of Australia’s major grain farmer lobby groups Grain Producers Australia (GPA) Andrew Weidemann said he will not be asking for government assistance to manage the current collapse in wheat prices.

International wheat futures prices have fallen 19pc in the past three weeks, with some analysts predicting further falls.

The levels of the fall are similar to the 22pc fall in milk solid prices since April which have sparked widespread outcry and calls of support for the nation’s dairy farmers from the general public.

However, Mr Weidemann said grain producers had one key advantage over the dairy sector in that they were marketing a non-perishable product.

“We can store our grain for some time and market it later, with hopefully better prices.”

Mr Weidemann acknowledged with the world glut of wheat that it was unlikely there would be a near term rally in prices, but said he felt most farmers would hang on to at least a portion of their grain in the hope of a price rise in 2017.

He said GPA was currently talking to the banking and lending sector on the issue, saying bank loans to allow farmers access to cash flow that would let them store grain rather than sell at prices little over the cost of production in order to generate operating capital would be critical to the sector.

“We see this as a better way of managing the issue rather than pushing for some sort of short-term relief from the government.”

“For the long-term health of the industry, it is not good to simply go looking for a hand-out when we have these sorts of problems, which, just like droughts, are going to emerge from time to time.”

“I think the banking sector has real scope to get involved here and help growers get the best returns for their grain they can in a tough marketing environment.”

FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

wtf
7/07/2016 4:32:22 AM

"non-perishable product"- I would not agree, if I just put grain in a silo/shelf and come back a year or two later will it be the same? not without controlling the humidity, insects, etc, Would wheat lose its usefulness if not stored/transported appropriately? Why is the Svalbard doomsday seed vault located 1300 klm beyond the arctic circle in the permafrost where they remain frozen without power? Sure, milk has a higher relative perishability to wheat, but wheat is not non-perishable.
Jock Munro
7/07/2016 4:52:35 AM

What are the merchant middlemen that now control the industry ( thanks to deregulation) going to do for Australian wheat growers? The mega merchants source grain from across the globe- our interests are of little concern to them. However we should prepare ourselves for plenty of spin.
Carter
7/07/2016 9:31:46 AM

I love me some cheap Wheaties.
LTF
7/07/2016 7:15:02 PM

Not very sound economics or business management for an industry leader to just say, "hang on to your grain now because the price is no better than cost of production and hope for an improvement in 2017". Remember how that went for the wool industry. The price kept falling for years and wool was far less perishable than wheat, which dies gradually and is also vulnerable to weevil attack and deterioration by moisture and heat. Holding costs demand higher prices tomorrow. Markets can always get worse you know. Every day you hold your flirt with disaster increases. Terrible advice.
GFA
7/07/2016 7:26:41 PM

"Hold your grain till the price goes up" and "We do not need assistance". Wow! The agricultural industries in Australia have been made to provide assistance to all other sectors of the community for many decades. That assistance comes via the fact that all farm input costs are loaded with the cost of many regulations all aimed at assisting the service sectors earning money from farm produce. The biggest cost comes from the highly subsidised and regulated labour market. Farm produce pays inflated input costs but is left with internationally lowest prices for commodity.

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