South East lucerne seed growers are facing a double whammy this harvest, with average to below-average yields and weaker demand.
After two exceptional years, where many certified varieties fetched $7 a kilogram or more, prices are tipped to drop well back.
The weather has also plagued crops with cooler weather during seed set, limiting yield potential, followed by up to 100 millimetres of rain in the past fortnight.
Alpha Group Consulting managing director James De Barro says it is a “middle of the range” harvest.
Dryland production had been the standout, with uncleaned yields of 200-300kg a hectare and up to 500kg/ha.
But irrigated yields were highly variable.
“A good yield off the header has been 600kg/ha, but not many have exceeded 800kg/ha and many have been below 500kg/ha,” he said. “There is no noticeable difference between flood and pivot (irrigation).”
Mr De Barro said the cost of the recent rain was yet to be seen.
“I doubt there will be a huge difference in the earlier crops harvested a month ago to those now off the header, but the difference will be in the clean outs,” he said.
“The earlier crops were below 10 per cent to 12pc, but the later ones may be 20pc-plus with brown and damaged seed.”
Lucerne Australia chairman Bruce Connor said it was disappointing, but not a disaster.
“That is growing seed – sometimes we have weather events and there is nothing we can do,” the Tintinara grower said. “The market is a little softer, so having a big crop might have put more pressure on prices.”
Seed Genetics International managing director Dennis Jury said demand from Australia’s largest export market, Saudi Arabia, had softened after two “big volume years”.
The Saudi Ministry of Agriculture was taking action to cut back irrigation from ancient aquifers by reducing the amount of forage produced in the country, instead opting to import more.
Mr Jury said it was too early to make a call on prices.
“Until the whole crop is off in a few weeks and we know the tonnage and it starts to flow through to export markets, it is hard to say where it is at,” he said.
“If the crop comes up short, we expect prices to rise, but it is more about arresting what could have been a significant decline in value.
“The talk early was it could be a big crop, which created downward pressure, but the seed set was not as good as many hoped for.”
Mr Jury said there were few carryover stocks from 2015-16, which was positive.
Demand for seed may also grow in markets such as Argentina, which are likely to increase their hay production to fill the Saudi shortfall.
