• Lynda Kiernan

Australian Grain Prices Reach Highest Point in Six Years

The uncertainty regarding Australian grain output and concerns over weather conditions in the northern hemisphere have industries that rely on feed grain worried, and Australian wheat prices reaching their highest level in six years.

The spike in prices comes as El Niño is creating uncertainty about production, hay supplies are tight, and farmgate milk prices remain low, while drought in Canada, wet weather in the U.S., and a heatwave in Europe all add to the uneasiness within the industry.

Current prices of $320 per ton for old crop feed wheat delivered to Melbourne and $300 per ton for feed barley are on par with grain prices in November 2008 when drought drove up prices.

Because of elevated prices, some dairy farmers have cut back on grain rations in recent weeks. At current feed grain prices, two tons of feed grain per cow per year equals an extra cost of $60 to $80 per cow per year.

Malcolm Bartholomaeus, analysts with AvantAgri Australia states that prices may drop prior to the Australian harvest, but the market will likely retain the majority of the mid-year rally in values.

“Traditionally when we’ve seen these midyear rallies, the market retains most of that going into our harvest,” he said. “There is damage to the northern hemisphere crop that can’t be reversed — it’s a hit to the supply and demand equation.”

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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