Australia’s Record Grain Harvest Leads to Strong Demand for Export Services: Report

Bulk grain exports in Australia during the past two years have reached a new record, with the industry exporting a reported total of 40.6 tonnes from 2021 to 2022—61 percent higher than the industry’s yearly average.

This comes despite recent flooding events, labour shortages, and harvest delays.

According to a report (pdf) by the Australian Competition and Consumer Commission (ACCC), the high levels of production saw exporters export more grain outside of typical shipping months.

“The ACCC understands that the continuing increase in on-farm storage (in some regions) is providing growers greater control over their marketing and transport decisions than in previous years, including when and where grain is delivered,” the report states.

Total grain production reached a record of 65.7 million tonnes in 2021-2022, an increase of 11 percent on the previous record in 2020–21.

The report also states that there was a relatively larger increase in the amount of grain shipped before and the after the peak period compared to the grain shipment increase during the peak period.

Bulk grain shipments from Australian ports typically peak during the months of February to May.

“This was likely because the peak period was close to capacity in 2020–21, meaning additional grain from the even larger 2021–22 season was mostly facilitated in off-peak periods,” the report states.

Additionally, a record number of 32 exporters participated in the national bulk grain export market during 2021–22, including two new mobile loader operations. However, several facilities are being used by a small number of exporters.

“The addition of new mobile loader operations provided extra options and pathways to export Australian grain at a time of record demand,” Mick Keogh, ACCC Deputy Chair, said in a media statement.

“While additional bulk export facilities were a welcome development, it is unclear whether the recent increase in the number of port terminal services providers and exporters will prove to be a long-term trend.”

Overview of Australian States

Western Australia (WA) took out the record for Australia’s largest grain producer and bulk export state, recording 35 percent of national production at 18.2 million tonnes as well as 54 percent of total bulk shipments.

“WA’s record bulk export season was driven by a record harvest. At 23.1 million tonnes, the 2021–22 harvest was 30 percent larger than the previous record of 17.8 million tonnes in 2016–17. Additionally, 2021–22 production was 40 percent larger than 2020–21 (a then record bulk export season), and 42 percent above the average of 16.3 million tonnes,” according to the report.

However, WA has a relatively low level of domestic grain consumption

Australia’s populous state of New South Wales came in as the country’s second-largest producer of grain, accounting for 30 percent of the national production.

Meanwhile, NSW is Australia’s largest consumer of domestic grain, with consumption levels reaching 4.9 million tonnes. The state produced 20 million tonnes of grain in 2021-2022, making it NSW’s second-largest harvest on record.

Typically, a “substantial amount” of grain produced in NSW is transferred to Queensland and Victoria for domestic consumption and export.

“This means that grain usage (domestic consumption, container, and bulk exports) within NSW is typically considerably lower than production levels,” the report states.

Victoria was recorded as the country’s third-largest bulk export state accounting for 11 percent of national exports. Victoria produced 7.3 million tonnes, exporting 6 million tonnes, and is the second largest domestic market for domestic consumption.

Nationally, the gross value of agricultural production is forecasted to reach $85 million in 2022-2023, with the combined value of agriculture, fisheries and forestry production forecasted to reach $91 billion.

Flooding Impacts and Its Cost

Extremely high rainfall and low temperatures have led to upgrades in crop production forecasts in many parts of the country, adding an additional $4 billion in crop value, according to the Department of Agriculture, Fisheries and Forestry (ABARES).

Moreover, the combined value of agriculture, fisheries and forestry production is forecast to reach $91 billion.

However, water logging and associated flooding have been widespread along Australia’s east coast for a second consecutive year, damaging winter crops and delaying harvest.

Flooding has also caused logistical issues for supply chains, ABARES states, adding that “it is likely” that further severe weather events will occur over the summer.

“Impacts on individuals and businesses can be devastating, but when compared to aggregate state or national production, these costs tend to be overtaken by the effects of other factors. These can include the beneficial effects of higher rainfall in other areas fortunate enough to avoid flooding,” ABARES states.

The Department also states that total crop or livestock losses due to flooding are generally isolated to low-lying paddocks and riverine areas.

“[S]o most agricultural land is not directly affected,” ABARES states.

“It is too early to tell what the true costs of flooding are, particularly given most crops are yet to be harvested.”

Additionally, ABARES states that improved prospects in large parts of the country are expected to offset reduced prospects and crop losses in parts of the eastern states caused by widespread flooding and water-logging.

Meanwhile, data released by the Insurance Council of Australia (ICA) on Nov. 30 shows that the insurance bill for storms and floods since January 2020 reached $12.3 billion.

Follow

Henry Jom is an Australian based reporter covering local Australia news. Contact him at [email protected]

Source

You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply

Powered by WordPress | Designed by: Premium WordPress Themes | Thanks to Themes Gallery, Bromoney and Wordpress Themes