National News Australia
Breaking records and breaking hearts – Australian Winter Crop Forecast
Breaking records and breaking hearts – Australian Winter Crop Forecast
Rabobank
Australia is on track to harvest a near-record winter grain crop of 61.9 million tonnes, according to Rabobank’s 2022/23 Australian Winter Crop Forecast. But what will be a record for some farmers will be heartbreak for others, due to the impacts of excessive rainfall on grain volume, yield and quality in parts of the country.
In the newly-released report, the specialist agribusiness bank says despite the weather challenges, the nation is set to harvest its third consecutive bumper winter crop. Forecast to be down only one per cent on last year – which broke all-time production records – the total grain crop is estimated to be 41 per cent above the five-year average.
But it won’t be good news for all, the report says. While farmers in some parts of Australia will “reap record or near-record crops”, others in areas across New South Wales and Victoria are facing “yield, volume and quality downgrades due to excessive rains, washed out fields and unharvestable crops”.
Report author, RaboResearch agriculture analyst Dennis Voznesenski said while it was too soon to quantify the impact of heavy rainfall and flooding in recent days in Victoria on the state’s overall production, “there has been significant impact to yields on low-lying crops with many under water in central and northern Victoria, however crops on rolling and rising country have fared better”.
Nationally, Rabobank forecasts wheat production to come in at 35.5 million tonnes – down two per cent on last year, but 47 per cent above the five-year average. Barley production is expected to reach a record 14.8 million tonnes, up seven per cent on last season and 31 per cent above the five-year average. The canola crop is forecast to reach a record 7.2 million tonnes, also a seven per cent increase on the previous year and a whopping 81 per cent up on the five-year average.
Mr Voznesenski said “on the whole”, Western Australia and South Australia are set to break production records.
“While Victoria was on track to break production records until last week, we are going to have to wait for all the forecast rainfall to come through and for waters to recede to see the full impact of the rains on production,” he said. “The unfavourable conditions mean harvest is likely to be drawn out into January.”
He said a substantial increase on last year’s rainfall across the Mallee and Wimmera in Victoria and Murray Mallee in South Australia has set up some farmers in these regions to harvest all-time record crop yields.
Queensland is expected to see a large, but not record, crop harvested.
NSW farmers, however, especially those in central regions, are battling conditions even wetter than last year, Mr Voznesenski said.
“Excessive rain leading into harvest followed significant issues at planting, where some farmers replanted up to three times or had to abandon hectares all together,” he said.
“Across New South Wales, parts of Victoria and southern Queensland, we expect to see considerably less hectares harvested than were planted due to excessive rains either at planting, during the growing season or leading right into harvest.
“And the challenge of a wet harvest will be compounded by labour shortages, with an estimated 30 per cent of farms in Queensland and 27 per cent in NSW having to change harvest strategies as a result of insufficient labour.”
States
Rabobank forecasts WA to harvest a record total crop of 23.47 million tonnes, up two per cent on last year’s record (as reported by ABARES).
South Australia is also preparing for another record harvest this season, of almost 10.7 million tonnes, one per cent above the last record set in 2016/17 and a 27 per cent increase on last year.
Until the recent flooding events, Victoria’s total winter crop had been expected to come in at 11.5 million tonnes, an all-time record exceeding 2020/21 (the last record) by 17 per cent and up on last year by 26 per cent.
“Too much of a good thing” though has robbed Queensland of a record year, the report says, with excessive rainfall through the season resulting in many regions harvesting 90 per cent of planted crop hectares, with some further south harvesting only 80 to 85 per cent. At a forecast total crop harvest of 2.6 million tonnes for the season, the state’s production will be six per cent down on the previous year.
With NSW hardest hit by excess rain throughout the season, the state’s grain and oilseed production is expected to come in 28 per cent below last year, at 13.6 million tonnes.
“Depending on the region, only between 75 to 92 per cent of the state’s planted grains and oilseed hectares will actually be harvested,” Mr Voznesenski said.
Excessive rainfall had also weighed on NSW crop yields, while prevalent weed and disease issues had been compounded by farmers not being able to get on to paddocks to spray because of wet conditions.
“Crop quality has also been significantly impacted, with even more feed-quality wheat now expected from the state than last year,” he said.
Exports
With another bumper national harvest on the way, Australia will have plentiful grain and oilseeds for the export market, the Rabobank report says. However, the ability to supply world markets will be limited by supply chain bottlenecks, both in regional areas and with capacity at Australian ports.
The exportable surplus in Australia from the 2022/23 harvest is expected to exceed the nation’s official estimated 2021 national export capacity of 47.5 million tonnes, Mr Voznesenski said. “When an approximate figure is also added for still unsold 2021/22 crop, the exportable surplus could rise to 53.5 million tonnes, and this does not include an unknown volume of grain owned by the grain trade itself,” he said.
Commodity price outlook
For Australia’s grains and oilseeds, the report sees the strong local supply limiting the potential of prices moving above current levels for a sustained time during the harvest period.
“With another near-record crop in the process of being harvested, and still significant carry-over from last year, we expect local prices to be pressured below global levels during the key harvest window from now until January and likely into late March,” Mr Voznesenski said.
“Growers may see some local price upside between late March and May, ahead of the northern hemisphere harvest. But from late quarter two next year – when northern hemisphere grain starts coming on to the market – and with an expected rise in the Australian dollar, we are likely to see downward pressure on local prices.”
Global grain prices are expected to remain above the five-year average for the next 12 months as supplies from Ukraine and Russia continue to be unpredictable and global stocks below average, but prices are not forecast “under the base (most likely) case” to head back up to record levels seen between March and June this year, Mr Voznesenski said.
Locally for wheat, Rabobank forecasts national average APW1 Track/Free-In-Store prices to trade between A$390 and A$420 a tonne over the next 12 months, “with upside towards the end of quarter one and the beginning of quarter two 2023”.
For feed barley, national average Track/ Free-In-Store prices are expected to trade between A$320 and A$350 a tonne.
Strong global and local supply of canola is bearish for prices, however, there may be improvements in demand next year with proposed changes to biofuel mandates in the EU and a potential reduction in Canada’s export capacity later in the year, the report says. Prices for non-GM canola track/FIS are expected to trade between A$700 and A$830 a tonne in 2023.
Pulses are “still looking for love”, the report says, with more than 18 per cent of last year’s Australian pulse harvest estimated to be unsold, with this figure significantly higher in Queensland.
“A large rebound in lentil production in Canada is expected to weigh on prices over the next 12 months, while economic and political turmoil in Australia’s second-largest export market of Sri Lanka will also limit demand in 2023,” Mr Voznesenski said. “However, in the short term, recent rains and damage to the Victorian lentil crop could see price support.”
The outlook for chickpeas remains largely bearish, though early next year may see some upside from increased purchases from Bangladesh ahead of Ramadan.”
Farm inputs
Farm input costs – which have risen substantially over the past year – could weigh significantly on farm margins ”moving forward”, Mr Voznesenski said.
However, while there is notable risk for urea prices increasing, reprieve may be due for other fertilisers and agrochemicals in the near term.
Mr Voznesenski said with urea production significantly dependent on natural gas – which has been skyrocketing in price in Europe – the bank sees urea prices as having the largest “upside risk” moving into 2023.
For phosphates, there has been “demand destruction”, the report says, with high prices resulting in lower usage and larger than initially anticipated inventory, especially in the Americas, which is indicative of further price declines.
“The downward slide in global potash prices is likely to persist for the coming months,” Mr Voznesenski said, “with regional benchmarks taking a cue from further anticipated weakness in the Americas. Still, geopolitics around Russia and Belarus can definitely impact prices of both phosphate and potash.”
An expansion of agrochemical production capacity in China has seen prices decline this year, the Rabobank report says. “And under our base case, we expect further downside moving into next year,” Mr Voznesenski said.
National News Australia
Multiple people penalised for level crossing offences in Tamworth and Currabubula
Transport for NSW and NSW Police Crack Down on Level Crossing Offences in Tamworth and Currabubula
Transport for NSW is reinforcing the importance of safety at level crossings after a joint operation with NSW Police led to multiple fines and demerit points for drivers violating level crossing rules around Tamworth and Currabubula. Between September 16 and 27, police patrolled five level crossings to promote safety and remind motorists to slow down and follow level crossing regulations.
Level crossing offences in Tamworth and Currabubula
During the operation, police recorded seven level crossing offences, 12 speeding offences, and 23 other infractions, including mobile phone use, driving unregistered vehicles, and operating without a valid license. Among the violators, a 51-year-old man received a $544 fine and three demerit points for stopping on a level crossing in Tamworth. Two additional men, one from NSW and another from Queensland, as well as a woman from the ACT, faced the same penalty for failing to stop at rail crossings, with three other drivers penalized for disregarding level crossing rules.
Ralston Fernandes, Transport for NSW Director of Road Safety Strategy and Policy, stressed that these initiatives are crucial in raising awareness about the dangers of level crossing violations. “Despite a visible police presence, some motorists continue to disobey level crossing rules, risking deadly consequences for themselves and others,” Fernandes said. “Between July 2014 and June 2024, there were 64 collisions between trains and vehicles at level crossings in NSW, tragically resulting in eight fatalities and nine serious injuries.”
Acting Superintendent Martin Searle, Commander of Traffic Operations, highlighted the risks associated with level crossings, noting that trains may require over a kilometer to come to a full stop, making split-second decisions at crossings potentially life-changing. “We urge all drivers to exercise patience and heed crossing signs, as rushing across is simply not worth the risk,” he said. “Police patrol level crossings regularly, aiming to keep motorists safe and ensure everyone returns home safely to their loved ones.”
Motorists are reminded to expect police presence around level crossings and to approach these areas with caution, as enforcement operations will continue to support road safety across regional NSW.
Muval migration data for the first six months of 2024
According to national online removalist booking platform Muval, which has the most up-to-date internal migration data showing where Australians are moving, Melbourne is the number one capital to move to in the first half of 2024, with inbound traffic peaks in February and April catapulting the city into positive net migration for the first time since before COVID.
The latest moving data also shows that rising cost of living pressures continue to take their toll on Sydney and increasingly Brisbane, with the river city dipping as low as -13% into negative territory this year.
While rental moves are traditionally local, within the same suburb or neighbouring suburbs, Australians aren’t hesitating to cross borders in search of more affordable housing, more lucrative work or a cheaper lifestyle to maintain their current living standards.
With that said, industry-wide moving numbers are down around 20% on the same time last year. Overall, Muval reports that the current macro-economic climate of higher interest rates, tight housing affordability and housing shortages are having a cooling effect on moving generally.
As people typically enquire about removalist up to 30 days before they move, Muval’s data is a proven early indicator of moving trends in Australia.
Muval – Net Migration June 2024
Melbourne
For the first time since January 2020, Melbourne entered positive net migration in 2024. Off the back of a rise in inbound moves (30% of all major metro moves were to Melbourne in February and April) and a fall in outbound moves, down to 25% of all major metro moves in February which is the lowest on record, the city finally slipped back into positive territory with +13% net migration in February and +2% in April. The last time the city had positive net migration was before the pandemic (+3% Jan 2020) and it fell as low as -61% in August 2020 and -64% in September 2021 when thousands fled lockdowns in the city. When Melbourne’s outbound enquiries veered down, Brisbane and Sydney’s spiked, suggesting the traffic is flowing down from the increasingly expensive northern states.
Muval – Outbound June 2024
Brisbane
A rise in the cost of living in Brisbane, including skyrocketing housing prices up more than 60% since the onset of COVID and a rise in unit rentals of more than 50%, is affecting the city’s appeal as a place to live. Brisbane’s outbound moving enquiries have jumped to their highest level, reaching 23% of all major metro outbound moves in April. Averaging 22% of inbound metro moves in the first six months of the year, Brisbane came close to Sydney when it dipped to just 20% in January and February (Sydney accounted for 19% and 18% respectively). After peaking at +123% positive net migration in September 2021, Brisbane teetered around zero in the first six months of this year before tumbling to a record low of -13% in April. While it remains the second most popular city to move to behind Melbourne, Brisbane’s pandemic popularity has been replaced with an air of unaffordability.
Muval – Inbound June 2024
Sydney
Sydney has experienced a slight increase in inbound traffic during the first six months of this year, accounting for as much as 19% of all major metro inbound moves in January and June (the highest number on record for Sydney), to cement its place as the third most popular city to move to. This is a change from last year when Perth was third behind Melbourne and Brisbane. With an average of 30% of all major metro outbound moves coming from Sydney in the first six months of 2024, the Harbour City continues to boast the unfortunate title of biggest resident exodus. While there are glimmers of hope, this outbound movement has kept Sydney firmly in negative net migration between -41% and -52% in the first half of the year.
Perth
For the first time in years, Perth appears to be losing its strong grip on positive net migration. It is still the highest in the country, but it’s spiralling fast to pre-pandemic levels as interest in the state tapers off, perhaps as rents rise at a record rate. Perth saw the highest annual rent increase of all capital cities in the last year (up 14 per cent year-on-year), as well as the highest rise in rent values since the onset of the pandemic at nearly 60 per cent. After a 2021 pandemic peak of +181%, net migration dropped to +10% in June, off the back of low inbound traffic of just 14% and high outbound traffic of 12%. Perth hasn’t had outbound traffic consistently in double digits since the start of 2020, it sat between 7-9% in 2022 and 2023.
Adelaide
After consistently sitting around 9-10% in 2023, Adelaide’s outbound migration appears to be slowing in the first six months of 2024, dipping as low as 7% in April and staying on 8% in May and June. However, inbound traffic hasn’t picked up this year and at 7% in April and May, it’s Adelaide’s lowest share of inbound major metro moves on record. After entering negative territory in August 2022, the city remains in negative net migration in 2024 hovering between -7% (June) and -23% (February and May).
For more information visit muval.com.au
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