CANOLA'S stratospheric rise continues with prices cracking $1000 a tonne.
While prices in four figures have occurred in broadacre crops with smaller overall production, such as lentils and Kabuli type chickpeas, this is a record for a mainstream crop in Australia.
Prices earlier this month touched $1020 a tonne in Western Australia and just crept over the $1000/t mark delivered to crushers on the east coast.
Australian Oilseeds Federation (AOF) executive officer Nick Goddard said the current prices smashed previous highs out of the water.
"This is the highest we have seen in terms of prices by a significant margin and combined with the good crops leading into harvest in most regions it is a real opportunity for growers to cash in," Mr Goddard said.
Using Australian Bureau of Statistics export data, Mr Goddard said the average price was just $579/t as recently as the 2017-18 season.
With the current prices, which he estimated would average $850/t over the course of the market season, combined with projected production of between 4 and 4.5m tonnes, compared to last year 4.3mt, Mr Goddard said it was set to easily be Australia's most valuable canola crop on record.
"This is going to be one of those seasons that are remembered for a long time, hopefully for all the right reasons if we can get the crop off safely," he said.
The good news extends beyond the farmgate, with Mr Goddard saying crushers, even with the high input cost of canola, were also reporting good margins.
"The crushing industry roughly works on two years in five losing money, two breaking even and good margins one in five years, this will mean two good years in a row for them which is good for the industry," he said.
However, Mr Goddard cautioned Australian canola producers not to fall into the trap of thinking current price levels, supercharged because of a lack of product in the world's largest exporter, Canada, would become a new normal.
"With average production in Canada next year we will be most likely to see prices coming back off these current four figure offers," he said.
However, in good news for growers he did not see prices snapping back to lower levels, rather easing back off current highs.
Jordan Dusserre, Cargill canola trader, said the world market was looking to Australia in the wake of the shortage of Canadian grain.
"The current Australian strong canola price is primary on the back of a vastly reduced Canadian crop caused by drought," Mr Dusserre said.
He said demand from the biofuel sector was also contributing to the record prices.
"Tight global canola stocks combined with strong oil prices due to increased consumption and solid biodiesel demand in Europe has also been supportive of Australian canola prices," he said.
"These factors have increased EU demand for Australian canola as we look to fill the void due to a reduction in Canadian canola exports.
"This is good news for Australian canola farmers and the current forecasts for a record Australian canola crop will enable us to meet strong export demand," Mr Dusserre said.
Mr Goddard said while long-term the oilseeds industry was monitoring switches into electric vehicles at present biofuel mandates were stronger than ever.
"We are seeing the US buy more canola than ever before, which is soaking up more Canadian crop than usual," he said.
"We're even seeing more United States growers switch out of soybeans and into canola, due mainly to its higher oil content, 45 per cent versus 20-odd percent, but even this is not making up for that added demand.
"There will be firmness behind oilseed prices for some time, so even though this year is something special there is likely to still be good prices on offer into the medium term."
Looking forward to next year Mr Goddard anticipated strong demand for seed.
"The seed companies will be busy preparing as much hybrid seed for planting when the 2022 sowing season starts as possible."
Mr Goddard said, similar to this year, there would be big volumes of farmer-stored seed planted.
"Overall the total area planted to hybrids is rising but in percentage terms the hybrid area can drop in these years of high demand when the seed companies do not have enough supply to satisfy grower demand."
Mr Goddard said with the likely explosion in canola area set to continue, the industry was encouraging farmers not to go to the well too many times.
"People need to realise that it is generally a riskier crop and also remember the importance of good long term rotations," he said.
"The last thing we want to hear about is canola on canola on canola - we need to ease pressure on herbicides and in particular fungicides and keep the disease burden down."
This year, in spite of a wet spring, often conducive to fungal disease, Mr Goddard said there had been no widespread problems.
He said the major issue in terms of production had been dry conditions in parts of South Australia and a heavy frost in Western Australia.
"We're looking at close to record production but we may fall just short just with a few little things that have happened over the last month or six weeks.
"It's still going to be a really big crop but we may have just seen the cream on the top come off."
On the flip side he said growers with solid crops had the price signal to push the envelope on yield.
"The record prices mean people will be happy to go out with that extra spray or that extra application of fertiliser so that will boost yields in some areas by a small amount," Mr Goddard said.
In terms of summer oilseeds, he said prices had been high in soybeans domestically for the past couple of years so he did not think the high values would spur extra plantings this season.
Prices excite Great Southern farmer
FOR South Stirlings farmer Reece Curwen "all the stars have aligned" for oilseed prices to get to the heights reached and he is undeniably pumped.
In the past, Mr Curwen had hoped for prices in the $600 a tonne range and been absolutely stoked if the prices had a seven in front of them, so for the amount fetched to have tipped over $1000 is nothing short of extraordinary.
"For prices to have continued to move higher has been fantastic and while it has made marketing a lot harder to digest, it's definitely a good outcome if it's going to keep increasing," Mr Curwen said.
"We have a pretty consistent strategy of selling a certain amount during seeding, post-seeding and pre-harvest.
"We were selling at the $650 mark earlier this year which is a bit disappointing in hindsight, but when we looked at the past 10 years of pricing, what we sold at was a good decision at the time."
This season, Mr Curwen seeded 4700 hectares of canola, with about 800ha having to be reseeded due to waterlogging after well above-average rainfall.
"For us it hasn't been the greatest year for producing canola as it hates having wet feet, but we've learnt a lot about managing waterlogging conditions for canola," he said.
"However, the break-even yield to cover our cost is a lot lower than what it would have been when prices were at $600/t."
Mr Curwen has already turned his attention to the 2022 season and is looking at how much to sell given prices for next year are already high.
"It's something that we need to consider as prices are already sitting about $800/t which is really exciting for the canola industry in WA," he said.
"We will definitely be selling some so it's just a matter of how much risk we want to put on our production, but a bit of price certainty this early for next year is always a good thing."
Canola golden after waterlogging
"YOU can have a rubbish canola crop this year and still make money" - those were words to live by for Kojonup farmer Robert Egerton-Warburton after almost 700 millimetres of rain this season left some of his crops a bit worse for wear.
Mr Egerton-Warburton said it was a difficult season, like it was for most people down that way and a lot of the canola that went in during May is still flowering.
"We've got two paddocks that we couldn't get on and when we finally did they sat in water for about five months, so they're pretty much a write off and maybe only 50 per cent of it will be harvestable," Mr Egerton-Warburton said.
"Across the farm, a third of it is really excellent, a third is average and then a third will be below-average due to the waterlogging, so hopefully we should even out to an average year.
"In saying that, even if our worst paddocks only go one tonne per hectare, then that's still the equivalent of getting two tonnes a hectare in a normal season due to how high the prices are."
This year, Mr Egerton-Warburton seeded about 1600 hectares of canola, which is pretty standard for him and he didn't expand the program when prices started to rise earlier this year.
"We forward sold quite a lot of our production early, when prices hit aboutd the $700 mark, which a lot of people in the south have done as that's a decile 10 price," he said.
"We do have about 60pc still to sell, so whatever we haven't contracted already we will get a truly remarkable price for."
While canola prices have already reached between $700 and $800 for next year, Mr Egerton-Warburton said farmers from the Great Southern would likely be a bit sheepish about forward selling too much.
"After this year, people are feeling a little bit gun shy about going hard and selling too much in case we get another really wet year," he said.
"There's going to be that much moisture left in the soil that it'll be a wet start to next year regardless, so people will be tempered about going too hard.
"We'll start looking at it soon and we will likely sell some, but we won't be doing anything too extreme."
