Monday 17th Jun, 2019

GrainCorp receival figures show impact of drought on volumes

GrainCorp shed at the Port of Portland. Photo: David Sexton
GrainCorp shed at the Port of Portland. Photo: David Sexton

Early figures from GrainCorp’s east coast network have shown the dramatic impact of the drought on farmers, with volumes practically non-existent so far in the winter crop.

Continued drought conditions have seen what little grain has grown kept on farms, the ASX-listed grain storage and transport firm revealed on October 30.

The few farmers capable have managed to deliver just 25,500 tonnes to GrainCorp’s Queensland, NSW and Victoria sites so far in the winter crop.

Around the same time last year, those facilities had received 717,000 tonnes of grain.

The decline is most staggering in New South Wales, where just 1,000 tonnes has been received, down from 199,000 tonnes around this time last year.

In Queensland’s last year’s receival figure of 508,000 tonnes has declined to 21,000 tonnes this season.

And in Victoria, receivals so far are just 3,500 tonnes, down from 10,000.

GrainCorp says it has reversed its export supply chain so it can receive transhipped grain from ports to meet strong domestic demand. 156,000 tonnes of grain, mostly from Western Australia, have so far been received at port by GrainCorp.

“In northern regions, our teams are working with local growers to adapt our network for harvest,” the latest harvest update says. “This includes operating many sites on an ‘as needed’ basis.”

The report comes days after agribusiness bank Rabobank said it expected Australia’s winter crop exports to drop roughly 50 percent, with production the lowest in 10 years, as a result of poor rainfall in the eastern states.

Rabobank’s Winter Crop Production Outlook, released last week, forecasts a national harvest of just 29.3 million tonnes in the 2018/19 winter crop season, down 23 percent on last year.

The figure, the lowest in a decade, would be even lower were it not for a 3 percent improvement in Western Australia’s forecast, to 15 million tonnes.

WA volumes will make up more than half (52 percent) of the winter crop for the first time in two decades. Without the improved WA figure, the 2018/19 winter crop would be in line to be the worst in the last 20 years, Rabobank said.

“For vast regions of the eastern states, there will be no harvest, and where there is a harvest, yields will be anywhere between 30 percent and 50 percent down on average,” the report states.

Eastern states have been hit with late to no season-opening rains, below-average to lowest-on-average rainfall, and above-average temperatures during the growing season.

These factors coupled with damaging frost to reduce harvest volumes and impact grain quality.

The projected 29.3 million tonne national crop would be the fourth lowest in the past 20 seasons, only exceeding previous years of severe drought.

Report co-author and Rabobank agricultural analyst Wes Lefroy said the reduced harvest, combined with strong local demand and prices, will mean crop exports will drop around 50 percent year-on-year, to 13.9 million tonnes.

The largest component of the crop export, wheat, is expected to decline nearly 50 percent year-on-year to just 8.6 million tonnes.

Barley exports are set to be down 48 percent to 3 million tonnes. Canola is forecast to be down 41 percent, to 1.5 million tonnes.