Ongoing widespread drought conditions across eastern Australia is now being described as one in 20-year occurrence, with others saying it’s the worst in a generation.
Impacts of the drought are as dramatic as they are devastating.
Most Queensland farmers haven’t received enough rain to plant grain crops and those who have are desperate for rain to keep the crops alive. However, its NSW that has endured the full brutality of the drought with large areas of the state registering one its driest ever six-month periods from February to July.
Farmers are without feed, few are expected to harvest crops and water supplies are running sort. Many are saying the NSW winter grain harvest is now shaping up as the worst in a decade and still deteriorating.
Grain trucks that would normally be moving grain from farm to port are now having to move grain from Victoria and even SA. Inland roads have been a procession of trucks transporting grain and hay from the south where supplies are already running short.
Queensland has gone from exporter to grain importer. Shipping reports showing that more than a quarter of a million tonnes of wheat, barley and lupins will be discharged into Brisbane from June to August.
Farmers are also being forced to sell stock amid the lack of pasture and rocketing feed prices. Beef kill rates are sharply up on last year. Beef exports in July continued to surge on the back of the drought-driven heard liquidation by farmers. July’s beef exports were 150,157 tonnes which is the largest monthly figure since December 2015, which came at the end of a prolonged drought. Australia’s beef exports for the Jan/July period in 2018 are almost 642,000t which is 13 per cent up on last year.
Drought conditions show no signs of ending. Dry weather is threatening those few crops that were planted in southern Queensland. The insidious dry is also creeping further south and threatening crops in Victoria and SA.
Farmer incomes have been crippled by the ongoing drought.
Grain prices have continued to soar as Australia’s crop outlook deteriorates further as well as the worsening prospects for the European and Black Sea wheat harvests.
Prices for new crop wheat into Brisbane have climbed to $450 a tonne with barley fetching $425/t. Stockfeed wheat into the Darling Downs is now at $425/t, but sellers are scarce given the poor season.
ASX January wheat futures, which are reflective of the new crop harvest price, rallied by $24 to $393/t, an increase of 7pc for the week. ASX wheat futures now up by more than $75 since early July.
Global grain markets also surged higher last week with wheat and barley yields in European and Black Sea coming in below expectations. US wheat futures rallied by 5-6pc with the USDA expected to make further sizeable cuts to its global wheat production estimates later this week.