FOLLOWING a hiatus due to COVID-19, the much-anticipated Australian Grains Industry Conference returned last week in Melbourne.
The event attracts not only the big movers and shakers of the grain industry and the commercial grain world, but also the economists, who delivered the grim interest rate outlook we all know is inevitable.
However, the economists provided a generally positive market outlook for agriculture and grain; in fact there was a sentiment that the increased global grain consumption will lead to a shortage of grain supply in the next decade.
Yet, the external threats to the grain industry in SA and Australia loom large. The geopolitical uncertainty across the world is an unknown, even to the economists.
The impacts of the Russian invasion on Ukraine and government policy decisions on farming production are still yet to be fully realised.
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There's been government-imposed restrictions to dairy farms in New Zealand, the slashing of livestock numbers in the Netherlands to meet emissions targets, impacts on biofuel by Germany needing to comply with the European Union palm oil bans, Indonesia and India restricting food imports, tariffs on imported fertiliser in Canada and Sri Lanka's restricting or banning the import of fertilisers and agrochemicals.
The list keeps growing and it's hard to argue that it's not a worrying trend.
At AGIC, we were lucky enough to hear in-person from the Ukrainian Grain Association president Nikolay Gorbachov, who was incredibly emotional about the dire situation his communities are facing.
He highlighted the severe impact of the invasion, with Ukrainian grain previously being exported to 50 countries, but this harvest, only through Europe.
Farmers continue to sow crops despite harrowing stories of unexploded bombs in fields and crops being lit on fire.
The global geopolitical storm remains our biggest threat.
On the supply chain side, European infrastructure simply can't absorb the volume of Ukrainian grain.
In one example, a 17-kilometre queue of trucks waited 10 days to get into Romania to deliver grain.
These very real situations facing Ukraine grain producers were once thought unthinkable.
As ABARES pointed out, gross value for agriculture is set to top $80 billion in 2021-22 with record exports anticipated, partly thanks to a big canola crop.
In SA, strong rainfall has set us up for a third straight above-average crop and grain producers are doing everything they can to ensure it is of the highest quality.
But I can't help feel the global geopolitical storm remains our biggest threat and one that won't go away anytime soon.
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