AUSTRALIAN grain growers could unlock higher, more stable prices by expanding domestic use of grain through intensive animal production, according to Episode 3 market analyst Andrew Whitelaw.

Mr Whitelaw presented at the Australian Summer Grains Conference held at the Gold Coast earlier this month.

He said increasing domestic use of grain was key to providing value to growers, and the only way to do this in a meaningful way was via intensive animal production.

“It’s about value-adding grain, and that is where we get more bang for our buck by taking a whole-of-supply-chain approach,” Mr Whitelaw said.

Mr Whitelaw said typically, domestic use accounts for 30-40 percent of Australia’s total barley and wheat production.

He said the rest was exported, and a lot of that was used as feedgrain.

“The reality is most of our grains goes overseas, the majority of our canola goes into biofuels and our grains, the majority get processed into animal meat.”

“We process things for other people to value-add.”

Mr Whitelaw said domestic grain consumption in Australia had doubled since the 1990s, driven by growth in intensive animal industries, while flour production has remained largely static.

Aim for over 50pc domestic use

He said during drought years when pasture levels were reduced, local demand increased as more grain was diverted to feed.

“In the most recent drought, our domestic demand went above 50pc of production.

“If we can increase our domestic share of production, we can create inelastic demand that will be fantastic for Australian farmers’ prices.”

During periods when local demand has spiked, Australian grain prices have reached record highs, providing a clear example of the potential benefits of growing domestic use.

Mr Whitelaw said Australia’s strong domestic meat consumption, combined with increasing GDP in key Asian markets, offers a pathway to value-add grain locally while capitalising on export opportunities for beef, sheepmeat, and chicken.

“There is a lot of opportunity in countries like China, Malaysia, Korea, Thailand and Vietnam for us to export more meat.

“There is money in meat.

“We want to try and value-add that corn, wheat and barley by converting it to meat so we can make money.”

He noted that feedlot capacity in Australia is increasing, particularly in southern Queensland and northern New South Wales, aligning with the regions where most domestic grain demand exists through pig, poultry and cattle industries.

“The opportunity, in my opinion, is to increase the domestic feed market.

“Our feed demand is increasing every year with every person brought into the country, and through these growing export markets for meat.”

He added that despite interest in alternative proteins, global trends indicate that as incomes increase, meat consumption follows, reinforcing the potential of meat production as a vehicle to enhance grain demand and prices in Australia.

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