![Glut: It is look that a 3-tonne per hectare barley crop last year will need to yield 3.6 t/ha this year to match the same gross income. Glut: It is look that a 3-tonne per hectare barley crop last year will need to yield 3.6 t/ha this year to match the same gross income.](/images/transform/v1/crop/frm/SUkaUM4U8ZKEJibA4PNjwE/6cdb8c04-09d8-48b4-a6dc-19842bc163ab.jpg/r162_75_1572_1120_w1200_h678_fmax.jpg)
As a rule of thumb, most growers need at least $260 per tonne delivered port for wheat and barley to be fully profitable. This week ... alarmingly feed barley fell to $172 per tonne.
The outlook for harvest prices has taken a negative turn.
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It was important for wheat to hold at lows set in early August, and when that did not happen the outlook for prices took on an even more negative tone than we already had.
As a rule of thumb, most growers need at least $260 per tonne delivered port for wheat and barley to be fully profitable.
The other grains fit in around those benchmarks.
For growers where freight rates are higher, or production costs are higher, the land price should be the adjusting factor.
This week new season wheat prices fell to $219 per tonne Port Adelaide, but alarmingly feed barley fell to $172 per tonne.
Only canola at $513 per tonne is near the benchmark price level.
Unless prices recover, we are looking at a $40 per tonne drop in wheat prices from last year’s harvest average, and barley prices are currently $36 per tonne under.
Yields will need to be significantly better this year to cover the lower prices.
For example, a 3-tonne/hectare wheat or barley crop last year will need to yield 3.6 t/ha this year to match the same gross income.
At this stage the season is looking strong, and where yield potential was sitting at 3-tonne/hectare at the end of August last year, rainfall to date is indicating 4 t/ha this year.
If yield potential holds during spring, that will be what makes this year a better year than last year, despite the sump in prices.
It would be nice to get a decent spring for a change – 2010 was the last time we had average rainfall for September and October, and since 2005 there have only been two springs that hit the long term average.
A good spring will salvage this year for South Australian growers, but it will be a two-edged sword.
What currently looks like being a very big crop for Australia will simply add to global grain supplies and work to keep prices under pressure for longer.
- Details: 0411 430 609, malcolm.bartholomaeus@gmail.com or @Malcolm_Bart.