Australian grain producers make strong recovery from millennium drought: report

25.07.2016

A stocktake of Australia's grains sector reveals production has returned to long-term averages, with growers recovering financially from the millennium drought.

Grain Growers has published its State of the Australian Grains Industry 2016, updating its previous report from 2011.

It paints a picture of an industry transformed by deregulation and opened up to the forces of international markets.

Average grain production across the sector has increased in value by 50 per cent, to $13.5 billion in the five years to 2015, when compared to the previous five year period.

Grain Growers manager of trade and market access Dr Cheryl Kalish-Gordon said growers had also seen healthy increases in farm cash incomes.

"We've seen the rate of return has also increased, especially for family-owned large farms," she said.

"We do see some negative returns for smaller farms, which is disappointing, but they have improved from their pre-2010 level."

Market analysis presented to attendees at the Australian Grains Industry Conference in Melbourne on Monday pointed to booming future demand for feed grains, off the back of rising protein demand in developing economies.

LMC International head of oilseeds research, David Jackson said growth in demand for biofuels had levelled off, while demand for feed grains continued to rise.

"It is a huge industry growing at 3.5 per cent each year, you can't expand yields by that much each year," he said.

"The decade of biofuels is over, the decade of feed demand has begun."

Australia's ability to produce those grains is limited and although canola is a highly valuable crop for Australia its production is limited by agronomic factors such as crop rotations.

Dr Kalish-Gordon said the predictions should not be cause for alarm for Australian farmers.

"The forecasters place the expansion in oilseed production at the feet of soybeans, something we grow very little of," she said.

"But prices will ultimately drive the mix of grains Australian farmers grow, and we still have grains we can supply into feed grain.

"They are all substitutes, so if the prices of soybeans takes off, then so to will canola prices."


abc

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