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Feedgrain focus: Lambing concerns propel NSW to new highs

by Liz Wells, 16 August 2018

PRICES for wheat and barley delivered to New South Wales mixed farmers have climbed around $20 per tonne in the past week, signalling a fresh round of buying as spring lambing draws near amid limited pasture growth and uncertain prospects for winter crops.

Spring lambing is expected to boost demand for grain over coming weeks in NSW. Photo: Meat and Livestock Australia

Harden-based Delta agribusiness broker, Brad McKinnon, said the market for old-crop wheat delivered to mixed farmers on the southwest slopes was now trading at $460-470/t, and barley had hit $485-$495/t.

“It’s all people feeding livestock, it’s 40t loads, and it’s coming out of the Wimmera,” Mr McKinnon said.

Handy-sized cargoes from South and Western Australia are continuing to make their way into Brisbane, and have capped the southern Queensland wheat and barley market at $465-470/t delivered Darling Downs.

Vessels from the same origins are also coming into Newcastle to supply the Hunter Valley milling and stockfeed market, with a barley cargo from Western Australia said to be scheduled to dock in Newcastle on Monday.

However, grain ex Newcastle does not price on to the central and southwest slopes and plains of NSW, which are key prime lamb areas, and producers are conscious of keeping nutrition up to their ewes to avoid pregnancy toxaemia and lambing losses.

Mr McKinnon said paddock feeding of livestock in the southern half of NSW was pulling Wimmera grain away from its natural market in Victoria’s Goulburn Valley.

“Producers in the Goulburn Valley are having to pay more to keep that Wimmera grain in Victoria, and that competition from NSW has seen the market go up quickly.

“There’ll be a lot of spring lambs on the ground soon, and they’ll all be on grain, because stock are coming off grazing crops now.”

Hay or grain

Trade sources said graziers were sourcing grain for paddock feed up to October, when growers would be making the hard decision about whether to cut winter crops for hay, or hold them for grain.

“If you can cut three or four tonnes per hectare of hay and get $1600, that will give you a lot more money than 1t/ha of grain.”

New-crop has been trading this week at $455/t deliver port for wheat, and $415/t for barley.

Crops in southern NSW and north west Victoria are holding on to their yield potential thanks to showers, but have little to no subsoil moisture to draw from if wind, frosty nights and warm days start to stress them.

The Wimmera Grain Company’s accumulation manager, Oliver Reid, said the NSW pull on Wimmera grain stocks had become evident since June.

“In the past couple of weeks, it’s been very obvious, and a lot of hay has been carted out of here too.”

Mr Reid said drought subsidies and buying from charities to assist drought-affected graziers had heated up the Victorian market.

“It seems to have inflated the price of grain,” Mr Reid said.

Lentils in demand

Frost-damaged lentils from last year’s harvest are working themselves into the paddock feed market at around $330-$350/t ex farm in the Wimmera.

“That’s the silver lining for people who have off-spec lentils which they can’t sell into the export market.

“People wouldn’t have thought about feeding them to stock in a different market, but compared with peas ex farm at $420-$430/t, lentils are cheap.”

Cottonseed may stabilise

Cottonseed delivered Darling Downs this week was quoted $630/t with stocks in the north said to be tight.

In southern NSW, cottonseed was still readily available for delivery in nearby months, and prices paid have recently reached $600/t ex gin.

“Drought demand is still driving values, although the market may be showing signs of stabilising,” cottonseed broker Hamish Steele-Park said.

New-crop concerns

Prices for new-crop are sitting at around $430/t delivered Darling Downs for barley, and around $380/t delivered southern ports.

Mr Reid said the southern port price had risen around $100/t since the start of the growing season, when some growers committed around 10 per cent of their forecast production.

“Since then, they’ve consistently had rain to keep the crop going, and in the past month, most in the Wimmera are set until the middle of September, but they’re concerned about spring.”

“That’s helping to drive prices up, because the trade is long and happy to be that way while the market’s rising, and farmers are not letting tonnes go.

“The grower wants to get through September and see how October looks before they sell much more.”

Byproducts run dry

Stockfeed Manufacturers’ Council of Australia development officer, John Spragg, said demand for feeding animals has increased, and it would principally be grain which went into the extra feed because there was no surplus of byproducts.

“Stockfeed manufacturers historically have capacity to meet further demand, but this year, as dry conditions have become more serious, the supply of raw materials in eastern Australia has dried up.”

Manildra Group’s Ron Arnold said byproducts like dried distillers’ grain and mill-run and meals from processors were fully committed.

“There is nothing available in NSW.”

 

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