ALTHOUGH rising grain prices have seen values for feed barley soaring to $400 a tonne delivered to the Darling Downs in Queensland, concerns about the season ahead mean it may not be enough to attract those holding old crop stocks in the Wimmera to sell.
The flurry of demand from northern NSW and southern Queensland has seen grain moving from thousands of kilometres away.
Wimmera grain is moving to the Darling Downs and northern NSW – a journey of over 1300 kilometres.
However, while the prices are high in Queensland, the hefty freight component means Wimmera prices are much more modest, clocking in at a shade over $300/t for most old crop cereals.
“It’s a good price but that price comes back a fair bit when you’re talking Victoria or South Australia where most of the remaining grain is held,” said Grain Producers Australia chairman Andrew Weidemann.
He said the current prices were unlikely to see farmers holding grain selling until more is known about the season.
“We’re all waiting to see what happens through the winter, if there is more rain it will dampen the fears of a big drought, but if stays dry grain will become even more valuable,” Mr Weidemann said.
He said drought hedging had already begun.
“At present, mixed farmers would want to ensure they have adequate supplies for their own livestock first and foremost, realizing there won’t be any feed for at least the winter period and possibly longer.”
He said farmers without livestock would have satisfied the cost of planting for the upcoming season so would be in no hurry to sell off remaining reserves.
Mr Weidemann said the possibility of the drought premium currently in place in northern NSW and Queensland spreading was realistic but added there would be a tipping point where it was no longer worthwhile for end users to buy grain.
David Jochinke, Victorian Farmers Federation (VFF) president said farmers with on-farm storage were comfortable holding onto grain for now.
“What happens from here very much depends on the weather.”