Australia's livestock industry will be forced for the first time
to import grain from overseas if local supplies continue to dwindle
in the crippling drought, producers have warned.
Grain producers are predicting a two million tonne grain shortfall
for the eastern states, as ABARE today released a revised down
forecast for 2007-08 winter crops.
The winter wheat crop output is now forecast at 12.1 million tonnes
compared to a previous estimate of 15.5 million tonnes.
Grain and livestock industry representatives met at the Feedgrain
Partnership (FP) Drought Summit in Canberra today to discuss the
effects of the drought.
FP chair Kathleen Plowman said if local producers could not meet
the needs of the livestock industry it would be forced to consider
importing grain.
"Livestock industries have always said our process is not to import
grain from overseas markets because even though they have
quarantine (regulations) there is always a risk," she told
reporters.
"However, if the market can't supply our needs and prices move in
such a way that makes it affordable for us to do so, we will do
so.
"Naturally, we would try to seek it from the west coast but a lot
of that ... grain crop is going to be committed anyway to the
export market, particularly in the first half of next year."
Plowman said moving grain from the west to the east coast was
expensive due to freight costs.
She said the two million tonne grain shortfall for the east coast
could be partially eased by a strong sorghum crop.
"What happens with the sorghum crop, we don't have a good handle on
that," Ms Plowman said.
"That is going to be an important factor. If we get a good sorghum
crop that will alleviate some of the pressure on the east coast but
it won't be enough."
ABARE said today barley is forecast at five million tonnes against
a previous prediction of 5.9 million tonnes.
This year's canola crop is now estimated at 900,000 tonnes versus
1.1 million tonnes previously.
With the exception of Queensland, pockets of northern NSW and
southern Western Australia, rainfall during the critical
September-October period has been below to very much below average
throughout the grains belt, according to ABARE.
NSW has been particularly dry, with many regions recording their
lowest September-October rainfall on record.
Plowman, who is general policy manager for Australian Pork, said
soaring grainfeed prices had hit her industry particularly hard
because of the flood of imported pig meat.
"Producers are losing something like $50 a pig they produce and the
industry is bleeding something like three to five million dollars a
week," she said.
"We can't sustain those loses.
"The industry is actually down on its knees. Some farmers are
lucky to walk away with the shirt on their back.
"It's devastating - I have never seen it like this before."
Plowman said the FP would seek an urgent meeting with government
to enforce more regular and better quality reporting of grain
stocks.
Meanwhile, outgoing executive director of the Australian Lot
Feeders' Association, Helen Murray, warned government-mandated
levels of ethanol in fuel would send food prices soaring.
Politicians, such as Deputy Prime Minister Mark Vaile, have used
the federal election campaign to spruik the benefits of
ethanol-blended fuel.
But Murray - who was joined by organisations such as the Australian
Egg Corporation and Australian Dairy Farmers Limited - said those
plans would cause a major distortion of feed-grain prices and food
expenditure because of uncertainty over climate change and
Australia's propensity for drought.
