Grain Business magazine - July 2015

JULY 2015

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The ten million tonne challenge

COVER STORY/ RAVENSTONE, GANMAIN, NEW SOUTH WALES

GRAIN MARKET UPDATE/ WORLD AWASH WITH GRAIN

COTTON/ THE SOUTH WILL RISE AGAIN

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01 02 04 06 08 14 16 18 20 26 28 32 37 38 40

FOREWORD/ A WINNING START, A POSITIVE OUTLOOK

GRAIN MARKET UPDATE/ WORLD AWASH WITH GRAIN

GRAIN MARKET UPDATE/ GLOBAL PRODUCTION SET FOR ANOTHER BUMPER CROP

GLOBAL INSIGHT/ PULSE PRODUCTION TO INCREASE IN 2015

GLOBAL INSIGHT/ DISCOVERING THE SUPPLY CHAINS OF EASTERN EUROPE

SUPPLY CHAIN/ SUPPLY CHAIN MAKES AUSSIE GROWERS MORE COMPETITIVE

YIELD/ THE TEN MILLION TONNE CHALLENGE YIELD/ IT’S ALL ABOUT THE FINISH

FARM PROFILE/ RAVENSTON

DISEASE MANAGEMENT/ GO EARLY AND GO HARD ON GREEN PEACH APHID

FARM SAFETY/ OLDER FARMERS AT HIGH RISK

COTTON/ THE SOUTH WILL RISE AGAIN

COTTON/ COTTON INDUSTRY EXPANSION FOR GLENCORE GRAIN

© Copyright. Editorial material published in Grain Business is copyright and may not be reproduced in any form without written permission from the Publisher or Editor. Print Post Approved: PP 510545/00616 PUBLISHER Glencore Grain Pty Ltd 124-130 South Tce Adelaide, SA 5000.

T: (08) 8211 7199 E: gbm@glencoregrain.com.au DESIGN & PRODUCTION fuller.com.au ADVERTISING Jane McBride Communications Manager, Glencore Grain T +61 8 8304 1368 jane.mcbride@glencoregrain.com.au COVER NOTE Jason, Scott and Paul, Ravenstone.

COVER PHOTO: Harris Studios

INDUSTRY SPOTLIGHT/ THE LINK BETWEEN SHIP AND SHORE

TECHNOLOGY/ FARM ROBOTS WILL CUT COSTS AND BOOST PRODUCTIVITY

At Grain Business, we want to provide useful, insightful, and up to date information in each and every issue. If there are any topics you would like to see featured in future editions or if you have any feedback about Grain Business, please contact us at gbm@glencoregrain.com.au

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FOREWORD

FOREWORD/

PHILIP HUGHES, GENERAL MANAGER, TRADING AUSTRALIA/NEW ZEALAND

A WINNING START, A POSITIVE OUTLOOK Australia’s winter crop is all but sown. While there was limited subsoil moisture at sowing, a majority of areas have had timely rain and the crops have germinated in good condition.

I

n fact the only negative is that some small isolated areas have experienced poor weed control, with a lack of early rain not allowing a full knockdown.

Now we wait for good follow-up rains – as our article on page 18 states “It’s all about the finish”.

In this edition of Grain Business we look at the global and local factors that will have an impact on Australia’s grain market outlook in 2015/16. A major influence is of course climate and forecasters are predicting an El Niño weather pattern coming into the Australian spring.

International climate models surveyed by the Australian Bureau of Meteorology confirm that sea surface temperatures will remain well above El Niño thresholds into the southern hemisphere spring – an indicator of below-average winter and spring rainfall over eastern Australia and above-average daytime temperatures over the southern half of the country.

On the brighter side, the sorghum

JULY 2015

harvest in northern NSW and Queensland is virtually complete.

The crop size was above average and Australia is experiencing strong export demand from China.

The cotton harvest is also underway and in this edition we take a look at the expansion of the cotton crop in the Riverina region of southern New South Wales, where the area planted to cotton has increased from 6,700 hectares in 2004 to 36,000 hectares in 2015.

Australia’s grain industry supply chain is constantly evolving to meet the needs of Australian growers as well as the domestic and international end-use customers. The Australian Export Grains Innovation Centre recently released its report comparing the Australian and Canadian supply chains. While each supply chain meets the needs of its customers, the report highlights the benefits of Australia’s bulk handling multi-user systems.

Along with examining the report in more detail, in this edition of Grain Business we’ve also provided special

insight into the supply chains in Hungary and Romania, two exporting countries in the Black Sea region. The complexities of their supply chains provide an interesting perspective for Australian growers.

Finally in our story on page 16 “The Ten Million Tonne Challenge” we examine the need for Australia to be ahead of its competitors, not just by improving production and yield but also profitability and continuing to meet the needs of our end-use customers.

Philip Hughes General Manager, Trading Australia/ New Zealand, Glencore Grain.

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

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GRAIN MARKET UPDATE

GRAIN MARKET UPDATE/

WORDS/ PHILIP HUGHES, GENERAL MANAGER, TRADING AUSTRALIA/NEW ZEALAND, GLENCORE GRAIN

WORLD AWASH WITH GRAIN Winter grain crops in the northern hemisphere have come out of dormancy in very good shape with no major production issues recorded.

A massive world carry-out of grain combined with good production prospects for this year, will have a major influence on the global demand for Australian commodities in the last half of this year and for 2015/16 season.

Although the world is awash with grain, there are a number of factors which will influence Australia’s outlook in 2015/16.

US production The United States Department of Agriculture (USDA) is currently forecasting US wheat production of 57 million tonnes (a two million tonne increase on last year); soybean production of 105 million tonnes (a 3 million tonne decrease on last year but still well above the ten year average), and a corn crop of 346 million tonnes (a 15 million tonne decrease on last year but still well above the 10 year average). That being said, the southern central US hard red winter (HRW) wheat belt, and to a lesser extent soft red winter (SRW) wheat crop, have both experienced incredible unseasonal rain events – in many cases all time record rains in May. As a result, downgrading of the HRW crop size and quality is very likely with harvest due to start as Grain Business goes to press in June.

The spring wheat crop was planted in the US and Canada in April/May and conditions have been very good with the crop well advanced compared to the five year average. Corn and soybeans are also being planted in ideal conditions in the US. While the corn and soybean growing seasons are ahead of us, it is worth noting that El Nino years in the US have historically had a positive effect on production and led to slightly above average corn yields.

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Hedge fund influence International hedge funds, superannuation funds and similar investment funds are also playing a significant role in the paper trading of grain commodities.

While they don’t influence physical production and consumption they do have a major impact on futures price volatility due to the sheer volume of money that flows in and out of commodity positions.

The funds during April/May had very large short positions on the US futures markets, meaning that they are bearish on their price outlook. They will need to buy back their short position at some stage which has the potential to add further volatility to the market.

Australian conditions While timely rain has fallen in a majority of Australian growing regions, there is poor subsoil moisture due to lack of rain during the summer and early autumn.

The Australian Bureau of Meteorology as well as climate analysts in Japan and the US are forecasting El Nino conditions in spring.

Australia is expected to have a low carry of old season grain – particularly low protein grain – coming into next harvest.

Exports have been strong from South Australia and Western Australia due to the port capacity allocation and exporters needing to fulfil their shipping commitments.

Production in the eastern states was low in 2014/15 due to a drought in some areas, so a large proportion of the production was consumed by the domestic market rather than exported.

Australia’s carry out stocks this year are likely to be in higher protein grains. Western Australia had a reasonable crop of noodle wheat this year, however hard varieties like Mace are making inroads into noodle wheat plantings due to yield, price and performance.

GRAIN MARKET UPDATE

Currency The Australian dollar has further depreciated against the US dollar this year, making our export commodities more competitive internationally. However, other currencies such as the Canadian dollar and the Russian ruble have also fallen, making the overall environment more competitive.

Ocean freight rates Ocean freight rates are currently low and longer term forecasts are predicting freight rates will stay low. This erodes Australia’s freight advantage into Asia and makes it commercially viable for exporters such as Argentina, the EU and the Black Sea to competitively sell grain into traditional Australian grain markets in Asia.

Changes for Australian exports Australian grain exports to Iraq, Sudan and Yemen have been limited this year because of instability in the region.

In addition, Australia has not been competitive into Saudi Arabia due to competition from European exports. In response, Australia has had to rely more heavily on it’s core South East Asian markets.

JULY 2015

Russian exports The Russian government confirmed in late May the introduction of a new wheat export duty from 1 July 2015.

The new duty, aimed at protecting grain prices for domestic stockfeed and food consumers, will replace the tax levied on wheat exports since February this year which was also aimed at lowering domestic grain prices and food inflation levels.

Exports have been strong from South Australia and Western Australia due to the port capacity allocation and exporters needing to fulfil their shipping commitments.

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

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GRAIN MARKET UPDATE

GRAIN MARKET UPDATE/

GLOBAL PRODUCTION SET FOR ANOTHER BUMPER CROP umper global production is again forecast for the coming year according to the first estimates released by the USDA. Current forecasts show that global wheat stocks will increase for the third year in a row, with production only slightly less than last year’s record crop. In the coming three months as the northern hemisphere crop harvest progresses, approximately 75 percent of the global wheat production will be determined. The next big question will be quality and how that will influence the global market.

The feed grain outlook, including feed barley, is heavily influenced by corn. The major corn

STOCKS 210

720

200

700

180

680

160

660

140

640

120

620

GLOBAL BARLEY

PRODUCTION/CONSUMPTION (MMT)

CONSUMPTION

740

600

07/08

08/09

PRODUCTION

09/10

10/11

CONSUMPTION

11/12

12/13

13/14

14/15

100

15/16 est.

STOCKS

155

38

150

35

145

32

140

29

135

26

130

23

125 120

04

PRODUCTION

07/08

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

20

est.

STOCKS (MMT)

PRODUCTION/CONSUMPTION (MMT)

GLOBAL WHEAT

production areas in the northern hemisphere were planted in April/May in good conditions and corn, similar to wheat, is forecast at near record production levels.

In recent years, the Australian malt and feed barley market has been primarily influenced by Chinese demand, rather than traditional Middle Eastern markets, and this looks set to continue.

The global oilseed outlook will again be driven by near record global soybean production forecasts.

However, global canola production is expected to come down from the past two record years, with some potential production concerns in Canada, the world’s largest canola exporter.

STOCKS (MMT)

B

GRAIN MARKET UPDATE

The global oilseed outlook will again be driven by near record global soybean production forecasts.

CONSUMPTION

STOCKS

1020

210

980

200

940

180

900

160

860

140

820

120

GLOBAL CANOLA

07/08

08/09

PRODUCTION

09/10

10/11

CONSUMPTION

11/12

12/13

13/14

14/15

100

15/16 est.

STOCKS 8

PRODUCTION/CONSUMPTION (MMT)

75

5 60

4

55

GLOBAL SOY

3

08/09

09/10

PRODUCTION

PRODUCTION/CONSUMPTION (MMT) JULY 2015

6

65

50

SOURCE: USDA, WORLD AGRICULTURAL SUPPLY AND DEMAND ESTIMATES: MAY 2015

7

70

10/11

11/12

CONSUMPTION

12/13

13/14

14/15

15/16

2

est.

STOCKS

320

100

300

90

280

80

260

70

240

60

220

50

200

STOCKS (MMT)

780

STOCKS (MMT)

PRODUCTION

07/08

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

STOCKS (MMT)

PRODUCTION/CONSUMPTION (MMT)

GLOBAL CORN

40

est.

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

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GLOBAL INSIGHT

GLOBAL INSIGHT/

WORDS/ MOSTYN GREGG, PULSES TRADER, GLENCORE GRAIN

PULSE PRODUCTION TO INCREASE IN 2015 An increase in both Australian and Canadian production is forecast for 2015.

I

ncreasing Australian and Canadian production of pulses is forecast this year, in response to the strong demand from the Indian subcontinent (India, Bangladesh, Pakistan, Sri Lanka), Turkey, Egypt and the Middle East.

Long term consumption trends for pulses in these key markets are all on the rise due to population growth and the lower Australian and Canadian dollars are also influencing the importers’ ability to purchase.

However, this demand is tempered by a range of unpredictable domestic factors.

These include climatic cropping conditions, which are highly variable, as well as the domestic price which influences the area of crop planted each year by local growers.

The domestic economic and political situation in each importing country is also variable and this impacts the capacity to access finance and take opportunities to be part of the international trade. These importing countries can tend to be hand-to-mouth consumers with very little stock on hand, due to their inability to buy and store large volumes.

Canada supplies bigger volumes of all pulses, especially 06

peas and lentils, than Australia. Canada’s ideal growing conditions as well as its infrastructure for bulk exports (including a soft commodity port terminal in Vancouver) make it our major competitor.

Australia is generally a niche supplier when compared to Canada, but Australia’s pulses have the advantage of a lower moisture content. Australia is also the volume supplier of chickpeas, mostly exported from Queensland and New South Wales.

Canada’s production hits the export market in September/ October, and similar to other grains and oilseeds, their prices and ability to supply the market generally dictate prices in Australia as domestic demand for pulses is miniscule compared to supply.

Australia produced lower than average volumes last year due to the dry spring finish. This year production is expected to rise with an increase in area planted year on year due to historically strong prices.

Canada’s production is also estimated to increase in 2015.

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GLOBAL INSIGHT

GLOBAL INSIGHT/ WORDS/ JANE MCBRIDE

DISCOVERING THE SUPPLY CHAINS OF EASTERN EUROPE The Australian grain industry has operated a single system, multi-user bulk supply chain for more than 50 years, making it one of the most efficient exporters in the world.

River barge loading facility in Hungary

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GLOBAL INSIGHT

B

ut what are supply chains like in other countries – especially some of our growing competitors in the Black Sea region of Eastern Europe?

This Grain Business special report investigates grain supply chains in Romania and Hungary, to see how grain moves from the grower to the end-use customer and how quality is managed.

Romania, which sits on the western side of the Black Sea in eastern Europe, has an annual grain crop of approximately 22 million tonnes (about half of Australia’s grain production), across autumn and spring crops. Around 50% of production is consumed domestically, while the other 50% is exported, mostly through port terminals in Constanta on the Black Sea. The country has approximately 15 million tonnes of grain storage, made up of 4-5 million tonnes of on-farm storage, 9-10 million tonnes of trade and third party owned upcountry storage and 1 million tonnes of storage at Constanta port terminals.

There is approximately 6.5 million hectares of agricultural land in Romania, with 1-1.2 million hectares owned and harvested by local villages for their own consumption. In general, ownership of cropping land is fragmented with a majority of land owned in 1-10 hectare lots. Therefore, most cropping land is leased to farmers who consolidate land into farms between 500 -1500 hectares.

As crops are harvested grain is either stored on-farm, transported to third party owned storages or delivered

JULY 2015

direct to port terminals in Constanta. There are usually 10 companies who buy grain to export from Romania: seven international companies and three local. Grain is either purchased directly off-farm or through third party storages.

Constanta has six main grain export terminals with the capacity to load Panamax vessels and a combined storage capacity of 1 million tonnes. The terminals are each owned by different international traders and access to port capacity is via individually negotiated throughput agreements at the discretion of the port terminal owner.

Approximately 70% of grain exports from Romania occur from June to December. Another 25% follows in January to March with a very small amount of grain remaining for export in March to June. Low volumes of grain are carried between seasons, mainly wheat, with a little corn and barley.

Grain is moved to Constanta for export either by road, rail or by barge via the Danube River. Approximately 50% is delivered by road with 20% delivered directly from farm to port, another 20% by rail and the remaining 30% by river. Although the Danube River becomes too shallow for barges in summer, its location along the southern border between Romania and Bulgaria, makes it the main transport channel for the country and is the cheapest logistics option when available.

Road transport is used for grain coming from the southeast of Romania, a distance of up to 300 kilometres and a mix of road freight, rail and river barges are used for grain

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

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GLOBAL INSIGHT

Despite the larger distances from port (compared to Constanta), grain is also easily moved to Rotterdam via barge and rail.

NETHERLANDS

Rotterdam

RIVER DANUBE HUNGARY

ROMANIA Constanta

BLACK SEA

from western Romania. Of the three transport channels, rail freight is the least reliable as the rail infrastructure is in poor condition, with very little investment in the past 25 years, and it suffers from a lack of rail cars.

Glencore Grain has operated in Romania in accumulation, logistics and export for nearly 20 years.

Petr Kalashnikov, the Country Manager for Glencore Grain in Romania, says each exporter manages their own accumulation and logistics from the point of purchase to the point of export.

“This presents challenges for the exporter in terms of managing the quality and volume required for shipment,” Petr said.

“The exporter has a specific time period to accumulate and load a vessel at port. If the wrong quality or volume ends up at the port terminal, the exporter may fail to meet shipping requirements or may need to move grain back out of the port terminal,” he said.

To overcome this, quality testing occurs at multiple points along the supply chain to help ensure the right quality grain is delivered to the port terminal.

“Grain on farm is tested before being purchased,” Petr said.

“The buyer sends an accredited surveyor to visit the farm to inspect the grain and take samples for testing. The samples are taken from the silos by recirculating the grains (wherever possible) and the samples are sent to certified laboratories for full set of chemical analysis. It is tested again when the grain is out-turned from the farm or third party storage.

Depending on how the grain is moved to port, it is tested each time the grain is loaded or unloaded into a truck, rail wagon or barge. The final testing occurs at the port terminal, once the grain is discharged into the port storage and again as it is being loaded onto the vessel.”

The other key challenge for grain exports from Romania is the documentation required by the Government.

“For each truck load of grain purchased, 12-15 documents must be processed and retained,” Petr said. “These documents include storage records, transfer certificates and 10

product descriptions, for the purposes of traceability.

“Each document must be signed and stamped with the original copy to be retained for audit. No electronic documentation or storage is permitted.

“Glencore Grain exports approximately 1 million tonnes of grain a year from Romania, which requires us to retain 100,000 -150,000 documents. A third of our employees are in administration roles to process, analyse and store documentation,” he said.

As a landlocked country, Hungary’s exportable surplus either goes to customers within Europe or is shipped mainly from Rotterdam, Netherlands or Constanta, Romania.

Domestic consumption is approximately 5 million tonnes with any surplus exported.

The added advantage is the possibility of backfilling trains and barges with imported commodities, such as protein meals, which provide better utilisation of freight.

During the first decade of this century, growers had two selling options for their grain. They could sell either to the local institution of the European Union within the frame work of the Common Agricultural Policy - which offered a fixed price, or they could sell on the world market where prices fluctuated depending on global demand and supply.

The prices offered by the EU institution during some periods were higher than the actual market prices, therefore the growers supplied their goods to the facilities rented by the local institution in very big volumes. This caused considerable supply and demand imbalances and resulted in a large number of grain storage facilities being built between 2005 and 2010 by private companies, who leased those storage facilities for the EU purposes.

This occurred until 2011 when the European Union abandoned their grain intervention system; however, it has meant there is now an excess of warehouse storage and infrastructure. There has been three consecutive years of record crops above 15 million tonnes in Hungary without storage issues.

At harvest time the farmer either stores grain on-farm

GLOBAL INSIGHT

Constanta Port Terminal, Romania

JULY 2015

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

11

GLOBAL INSIGHT

or delivers it into a third party owned warehouse, generally within 50kms of their property. Previously, farmers sold their grain at harvest for cash flow but due to their improved finacial situation prices they are now more likely to market their crop through the year.

Warehouse storages range in size. Small operators range from 500 tonnes to 10,000 tonnes with the average being 5,000 tonnes. Larger operators range from 35,000 tonnes to 500,000 tonnes. Some larger warehouses have direct rail loading facilities, but most of the warehouses and all of the smaller warehouses have to move grain by road to a public rail loading facility.

Glencore Grain is involved in marketing, accumulation, exporting, storage, logistics and vegetable oil processing in Hungary.

Csaba Otto, the Logistical Manager for Glencore Grain in Hungary, said that to accumulate grain for an export vessel, marketers can be dealing with parcels of grain ranging from 50 tonnes up to 2000 tonnes.

“There was over investment in warehouse storage and there is now surplus capacity and the infrastructure is under-utilised,” Csaba said.

“At any point in time, marketers can own stock in hundreds of warehouses and the size of each contract is often very small.

“For example, in some seasons Glencore Grain Hungary has owned stock spread across more than 300 warehouses in this relatively small country. It makes the logistics task very challenging.

“We can load one train at up to 55 separate sites and there could be as many as three loading points for one river barge.

“Bigger customers in Europe are serviced by rail, while smaller customers are serviced by road.

“The European customers in different countries are serviced by different rail infrastructures, therefore the discharge facilities often requires different types of rail cars, axle weights and train lengths. It means that rail movements have to be well planned and it is not easy to change customers and destinations at short notice,” he said.

Managing the quality of grain through the supply chain is also challenging.

“We quality test grain before we buy it, either on-farm or in warehouse,” Csaba said.

“If we are buying grain through a warehouse, we also inspect the conditions of the warehouse because we might buy the grain then continue to store it for 5-6 months.

“Where possible, we deal with the larger warehouse providers and have annual warehouse contracts so we can have greater confidence about the quality of the grain,” he said. “The most important thing when you are moving grain such long distances is that the quality and volume are exactly what the customer has ordered.”

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The most important thing when you are moving grain such long distances is that the quality and volume are exactly what the customer has ordered.

ROMANIA – KEY STATS

Autumn crops (June-August) – wheat, barley, rapeseed – 10-12 million tonnes Spring crops (September-November) – corn, sunflower – 10-14 million tonnes Record production for the last two years Consumption is 50% domestic, 50% export Wheat and barley are the largest commodities produced and exported Approximately 70% exports occur from June to December Egypt is the major customer for Romanian wheat Corn is exported to the EU, Africa and Asia FARMS IN ROMANIA

Most farms are 500-1500 hectares, with an average paddock size of 15-20 hectares Only 7% of agricultural land is consolidated into farms over 5000 hectares with average paddock size of 75 hectares 150 average to maximum 300 horsepower tractors HUNGARY – KEY STATS

Autumn crops – wheat, barley, rapeseed Spring crops – corn, sunflower Wheat and corn are the key commodities grown Three consecutive years of record crops above 15 million tonnes Approximately 5 million tonnes domestic consumption with the surplus exported Exports are to neighbouring EU countries or shipped overseas FARMS IN HUNGARY

The average farm size is only nine hectares Approximately 2 million farmers listed in Hungary, but their land is mostly lease out and concentrated in bigger farms/co-operatives

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SUPPLY CHAIN

SUPPLY CHAIN/ WORDS/ PETER FULLER

SUPPLY CHAIN MAKES AUSSIE GROWERS MORE COMPETITIVE Australian grain farmers are among the most competitive in the world, not just because of the quality of their wheat, barley, legumes and pulses, but also our flexible and responsive storage and handling systems.

14

A

report by the Australian Export Grains Innovation Centre, comparing Australian and Canadian supply chains has found that Australia’s bulk handlers reduce risks for individual farmers, provide lower storage costs and more convenient selling options to multiple traders Tim Krause, General Manager, Viterra Operations said that while each supply chain has evolved to meet the unique requirements of its geography and its customers, the report certainly highlights the benefits of Australia’s multi user system.

“A major advantage of the Australian grain storage model is the ability to receive the entire crop during the harvest window,” Tim said.

“From the point of receival, Viterra accepts and manages the quality and tonnage risk of each delivery on behalf of growers and buyers.

“In Canada almost the entire crop has to be held on farm and is only moved as shipping requires during the year.

“In addition, Viterra’s electronic transfer system allows growers to choose in real time when and to whom they sell

SUPPLY CHAIN

their grain. This year, there have been 43 buyers within the Viterra system, including 19 exporters.”

The report says Australia’s export grain supply chains are inherently more flexible due to the higher number of ports.

“Viterra’s six ports benefit the overall supply chain by being close to the grain production areas,” he said.

“The benefit is twofold. It avoids having to cart grain long distances across the state to get to port. It also allows faster accumulation for export vessels and access to markets at peak times which is reflected in higher values for South Australian grain.”

The different geography of the two countries is also underlined in the relative efficiencies of each transport system.

“The report shows that Canadian growers benefit from the greater distance and economies of scale of their rail network, whereas Australian growers benefit from the shorter distances travelled which makes road transport more competitive,” Tim said.

Cascadia port terminal, Canada

JULY 2015

THE PUCK STOPS HERE Canada is becoming a more serious competitor in Australia’s key Asian export markets, which is why the Australian Export Grains Innovation Centre (AEGIC) commissioned its comparative report.

“Grain is Australia’s most valuable agricultural export and it is vital the sector examines the competitive pressures coming from other grain-producing nations,” AEGIC Chief Executive Officer David Fienberg said.

“The ultimate aim is to enhance the international competitiveness and value of Australia’s export grain and to return pre-farm gate value to grain growers.”

“The puck stops here – Canada challenges Australian’s grain supply chains” was released in May 2015.

The report reveals that: • Warehouse storage [such as in Australia] reduces risks for individual farmers, lowers storage costs and provides convenient selling options to multiple traders. These are significant benefits to Australian farmers not available to Canadian farmers.

• Australia’s export grain supply chains are inherently more flexible due to the multiplicity of ports and the greater opportunity to use either road or rail transport.

• In Australia a high proportion of the rail network used to transport grain is used exclusively for this purpose. By contrast in Canada, on the main lines, the grain transport task makes up only 17-18% of the total rail task.

• Overall, the Canadian supply chain (including on-farm storage and grain transport from the farm) is about $20.50 per tonne more costly than the average Australian supply chain.

• In Canada, ports are turning their storage capacity more than 30 times per year, compared to 6 times in Australia.

• Additional port efficiencies and cost reductions may be released through increasing the flexibility around vessel nominations and loading sequences.

For a summary fact sheet visit: aegic.org.au/media

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

15

YIELD

YIELD/

WORDS/ KATE FULLER

THE TEN MILLION TONNE CHALLENGE Could Australia grow 45 million tonnes of grain a year – a ten million tonne jump from our current average of 35 million tonnes of wheat, barley, canola and pulses?

16

W

ould this increase in production make us more competitive on a global scale – we currently produce around 15% of the world’s export grain?

Would this more dominant position reduce the volatility of global supply and demand and price fluctuations?

According to Graydon Chong, Senior Analyst for Rabobank’s Food & Agribusiness Research and Advisory group, boosting profitability is just as important as productivity.

“By definition productivity is all about creating more outputs with fewer inputs,” he says.

“The Australian grain industry will be more profitable, not only at the farm gate but also through the supply chain, if it continues to come up with innovative ways to produce more grain with less energy.

“By being more productive and profitable, Australia will see higher asset utilisation and higher yields at a lower cost per unit.”

Controversial as it is, the introduction of genetically modified (GM) corn crops over the past decade in the United States has provided a productivity edge not widely available to Australian farmers.

“While we haven’t really embraced GM in Australia yet, it has certainly had an impact on yield of GM corn in the US by limiting the losses normally associated with disease and pest damage,” Graydon says.

“Global corn yields have increased by 13 per cent over the past 10 years, while Australian wheat yields have stayed relatively stagnant.

“But it doesn’t stop there, the increase in yields has also incentivised the need for improved infrastructure

YIELD

By being more productive and profitable, Australia will see higher asset utilisation and higher yields at a lower cost per unit.

in the US, so you can really see that flow on effect happening in the supply chain.”

In the absence of GMs, Australian farmers have made productivity strides in precision fertiliser applications, more strategic rotations and better weed control – even embracing new technologies such as drones to map paddocks for maximising productivity.

Ron Storey, of NZX Agribusiness Australia told the Australian Grains Industry Conference in Singapore in March that despite rainfall rarely exceeding the ten year average, yields have been increasing over the last four years.

“Australian farmers, through best practice and new technology, are producing more with less,” he said.

But with a global oversupply of wheat leading to slumping prices, is increased grain production the only answer to maintaining Australia’s place in the export market and improving farmer profitability?

In the late 1990s and 2000s Australia has seen its export trade shift dramatically away from traditional markets to customers that are much closer to home.

“China, Indonesia, Vietnam and Thailand are becoming increasingly important,” Graydon says.

“Just 10 years ago Australia was exporting around 70 per cent of its grain to North Africa and the Middle East, now 70 per cent of exports are making their way into the Asian region.”

This considerable change gives Australia a serious geographical edge on its competition, but that’s not to say it can become complacent.

Markets such as South America have been significantly improving their infrastructure and ramping up production rapidly over the past five to six years. Another growing competitor exporting into Asia are the Black Sea “tigers”: JULY 2015

Russia, Kazakhstan and the Ukraine.

“The more efficient these developing countries become at producing grain, the more pressure we will see on our industry,” Graydon says.

“Producing more grain will help Australia maintain its position as a major competitor in the global trade, but one of the other ways it can remain competitive is to extract the most value from its commodities by maintaining its premium quality.”

While Australia’s production costs are some of the highest in the world, due to input and labour costs, Australia’s wheat exports are consistently high in quality.

“A big hurdle for our competitors is maintaining that quality consistency,” Graydon says. “Those countries around the Black Sea for example, don’t have the same systems in place that we do, to be able to produce, store and transport wheat to maintain quality,” he continues.

“Differentiation is key in global markets and Australia can extract the most value by delivering a higher quality product.”

In order to maintain its position as a leader, in terms of quality and innovation, however, Australia must continue to invest in research and development above all.

“There’s been a lot of pressure on research and development funding in agriculture over the last few years,” Graydon says.

“If we want to produce more grain at the same level of quality we are known for, we’re going to have to maintain our innovative approaches to farming, from a research perspective.

“Australia has always pushed the boundaries in terms of technology and it needs to continue to be innovative to meet production demand and remain competitive globally.”

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YIELD

YIELD/

WORDS/ PETER FULLER

IT’S ALL ABOUT THE FINISH While getting the seed and super rigs out of the shed before Anzac Day is always enough to put a spring in the stride of most winter cropping farmers, the real results of this text book season start will of course be in the finish.

18

P

eter Norris from Agronomy For Profit and Synergy Consulting, based in Geraldton, Western Australia, says while there is no crystal ball to predict how this season will end, his advice to farmers is to temper their excitement.

With early rains in the first week of March, around 50% of farmers on the West Coast of WA began sowing in April.

“A few farmers around here who swap between fallow and crop, depending on conditions, started seeding in early April,” Peter said.

“The countryside was quite green and everyone was busy getting herbicides on and knocking everything down in preparation for a good season.

“When you have early rains and get the sowing underway very early it’s easy to be over optimistic. But I’ve seen plenty of guys who have crops that could be on the cover of the rural papers in August but yield well below early May sown crops.

“When you look at the really good seasons there’s only one theme, and that’s a good finish.

“There’s good potential for this season, but who knows what September will bring.”

Peter says that while maximising yields is on everyone’s mind, many farmers these days prefer to save money and minimise costs rather than stretching their budgets to boost yields.

“Generally we’re in a decade of tough farming conditions – not just seasons but unpredictable prices and rising inputs. In that environment a lot more farmers are leaning further towards cost reduction than chasing big yields,” he said.

“Being so far north we get very high temperatures in spring, which has been a theme in the last few years. That can just destroy things out of sight, so our

YIELD

guys are a little more conservative now than they used to be.

“They have been more careful with nitrogen so their crops don’t get too leafy.

“In particular, with canola going in so early this year, farmers really need to go easy on nitrogen until they get to June and July, when they can make sure they’re getting good follow-up winter rains.”

Peter encourages local growers to spread the risk when it comes to nitrogen applications.

“Space it out so that you have the flexibility to change your mind, depending on how much rain you’ve had,” he says. “Get to know what the rain gauge is telling you.”

“I tend to get farmers to split their nitrogen application program into four or five parts and apply to one part of the program before each rain.

Rates vary from 10kg/ha of nitrogen in low rainfall areas in poor seasons up to 100kg/ha in very good crops in the western areas in the best seasonal conditions.

“Splitting up applications can spread the risk and the cost. You might get one or two lots done and the rains don’t come, so that’s it. If you spread out the applications and you don’t get the rain, you can put your nitrogen away in the shed until next year.”

As far as pests go, Peter warns those who have sown canola over lupins early in the season should watch out for diamondback moth.

“Canola is a host for diamondback, and because we have high temperatures, we tend to have major problems with this insect,” he said.

“Sclerotinia is a huge yield limiting problem for canola, and in these cases I would apply Prosaro fungicide to the higher potential canola crops.

JULY 2015

“Cereal leaf diseases such as Yellow Spot are a constant problem and to get around this I would use foliar fungicides on all high yield potential wheat crops.”

South Australian Landmark agronomist Mick Broad, who is based at Cummins on Eyre Peninsula, tells a similar story.

“Pretty much most of SA had a reasonable start,” Mick said. “There were some areas that missed the first rains in March but they had around 80mm from mid to late April,” he said.

“On Lower Eyre Peninsula, we have been encouraging farmers to use early sowing crop types and varieties, which can establish well before the winter rains on these heavier soils.

“Canola can’t really go in too early, so we had a lot of farmers planting in April this year. Wheat is another one farmers started planting in late April early May, particularly in areas that finish early and have lower water holding capacity soils.

“Areas with spring frost risk potential, such as the low lying noncoastal areas, need to look closely at their flowering windows and choose later maturing varieties, such as Yitpi and Trojan.”

“Long season varieties are a much safer way to go. You’ve got to be very careful sowing Mace too early particularly in the Mid-North – last year it frosted badly,” he said.

He said Soils had been warm enough in April for the rains to create reasonable nitrogen mineralisation, and this meant good natural growth in early sown crops.

But Mick still believes SA farmers will need to invest in additional nitrogen this year.

“Due to some bigger seasons, quite a few of our deep soil nitrate tests are coming back low. So even if this season

is only average farmers will need to add urea later on,” he said.

“The rates and application times depend on farm or soil type, I would use solid nitrogen not liquid, such as urea, up to twice in a season. It all comes down to water though. You need to know how much your soil is holding, particularly in lower holding capacity areas.

“In terms of weeds the normal post emergence control measures apply.

Ryegrass continues to be a challenge but there are some really good ryegrass chemicals that are working well for our farmers right now – Sakura and Boxer Gold herbicides have worked well for early wet seasons and were somewhat of a savior for farmers last year – but these really should have gone on at the end of last season,” he says.

With rust still haunting farmers from last season Mike’s advice is to diversify and have a protective strategy.

“Rust is always going to be a problem for wheat, so you have to be prepared to fight it, there are a number of good fungicides out there for rust, which all work very well,” he said.

And then there was the unexpected threat of and green pea aphids.

“Canola plantings are down 1015% on Lower Eyre Peninsula this year, which is traditionally the largest canola growing area in the state.

Beet Western Yellow Virus was a big problem last season and did a lot of damage throughout SA. “Our farmers have gone back to legumes and perhaps added a little more barley to their mix this year.

For those who have stuck with canola, its also good to be aware of Black Leg, which can be managed by rotating varieties and with careful use of fungicide.”

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FARM PROFILE / RAVENSTONE

RAVENSTONE FARM PROFILE WORDS/ MEL KITSCHKE

PROPERTY LOCATION

Ganmain, about 55 km north-west of Wagga Wagga

20

FARM PROFILE / RAVENSTONE

OWNERS/MANAGERS

Jason, Scott and Paul Hamblin, along with their parents John and Elaine.

Jason is married to Kellie and their children are Chloe (15), Matthew (12) and Abbey (10). Scott is married to Kylie and their children are Jesse (22), Colby (12), Seb (10) and Nate (7). Paul is married to Crystal and they have one-year-old twins Steele and Jack.

Jason, Scott and Paul are the fourth generation on Ravenstone.

The family is very heavily involved in the community. They all contribute to the local fire service (John is the fire chief) and the local football club (Jason is the junior club president and Scott is junior coach). The family is also actively involved in the local rural show society, with John a past president.

PROPERTY NAME Ravenstone

RAINFALL

(winter dominant rainfall) Annual district average 468mm (80 year average) Last 10 years average 452 mm Last year’s rainfall 424mm

SOIL TYPE Red loam

TOTAL FARM AREA

4659ha. 3267 ha of this is owned and 1392ha is sharefarmed/leased. 97% of the total acreage is arable, 3% is non-arable.

TOTAL CROPPING AREA ANNUALLY

4100ha, of which 50% is wheat; 17% is canola; 17% is barley; 6% is legumes and the remaining 10% comprises oats (for brown manuring and grazing) and lucerne.

LIVESTOCK

2300 Merino x Border Leicester ewes.

EMPLOYEES

All farming activities are completed by the owner/managers except for shearing, crutching and scanning of ewes.

MACHINERY

Tractors: Case Stieger STX 480 RTK auto-steer; Magnum 280 3M RTK auto-steer; Maxum 140 FEL. Seed Rig: 14m Case Flexicoil PTX600 bar with ADX3260 bin – 3m CTF Bin. 30.5 cm spacings.

Spray Rig: Converted Hayes and Baguley with bogey axles 3m, 42 m boom and 7000L tank, hypro pump with Field IQ. Harvester: JD9870 with midwest front .

Coolamon steelwork 24t chaser bin on 3m.

Trucks: 01 Kenworth 404 B double aluminium tippers or 4 deck Barker stock trailer.

1986 Western Star aluminium tipper.

JULY 2015

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FARM PROFILE / RAVENSTONE

When was the farming district settled?

In the early 1880s a railway line was built between Junee and Narrandera which led to the settlement of Ganmain Q What is the history of your farm?

A In 1893 Joseph Hamblin (great grandfather of John) from Kyneton, Victoria, bought a farm in Ganmain district and five of his sons made the move with him and started buying farms in the area. In 1912 John’s grandfather Ern Hamblin bought a farm with his wife Martha.

They renamed the property Ravenstone after his mother’s birthplace in Somerset, England.

Ravenstone has been farmed and passed down through four generations from Ern to his son Bruce then to John and now Jason, Scott and Paul.

Q What made you want to be a farmer?

A Jason, Scott and Paul all wanted to be involved in the agricultural industry. Jason and Paul came home on the farm straight after school. For Scott, the defining time was working in America as a custom harvester.

Here he experienced first-hand farmers getting great satisfaction at harvest time out of the results of their hard work through the season Q What education and training did you undertake?

A Scott studied for a Bachelor of Applied Science in Agriculture at CSU Wagga.

We all attend regular field days and trial sites and seminars to keep up with new and improved varieties, technologies and recently released chemicals. The internet has a wealth of information which we all search Q A

regularly for research and trials and also papers written on relevant information. The Twitter-sphere is very informative. It allows farmers to converse with anyone in the world about interesting topics. We find it is a good way to minimise the feeling of isolation, which we all experience in the agricultural industry.

Q How do you manage your cropping program?

A Our average crop rotation is wheatcanola-wheat-barley-legume-wheat-barley.

Half our cropping area is wheat and canola and barley each make up 17% of the remaining cropping area.

We understand that cropping is a high risk – high reward enterprise but we enjoy seeing crops growing and manipulating the system along the way to get the best gross margin at harvest time.

We use a mixture of early, mid, and later sown wheat varieties so that we can always achieve optimum sowing times.

We believe sowing in the early stages of the varieties optimum sowing period is an important management strategy.

All crops are direct drilled with a tyned implement into a full standing stubble using RTK steering to inter-row sow.

The only cultivation that occurs is when lucerne is brought back into the cropping phase.

Our fertiliser regime varies, based on soil requirements, crop type, plant requirements and also yield estimates.

Crops are typically planted with full phosphorus requirements and half nitrogen requirements – the average rate is 60-80kg/

We understand that cropping is a high risk – high reward enterprise but we enjoy seeing crops growing and manipulating the system along the way to get the best gross margin at harvest time.

22

ha MAP and 50-70kg/ha urea. These are banded away from the seed to protect against fertiliser toxicity at germination.

Lime is also applied once each rotation to manage our low pH soils and gypsum is used to top-up the sulphur requirements of canola and other crops in the rotations.

We try to do soil tests once per rotation to maintain a good idea of what the soil is doing. They give us an indicator of whether we are meeting soil and crop requirements and help us maintain macro and micro elements in the optimum range.

Our herbicide applications vary depending on stubble cover. Trifluralin, Logran, Sakura and Boxer Gold are used when we have low stubble covers, for example on the previous year’s canola and lupin stubbles. If the stubble cover is high we rely more on post-plant sprays, either pre or post-emergent.

FARM PROFILE / RAVENSTONE

For fungal disease control, we apply Impact to our fertiliser to aid with control of early diseases and use foliar sprays when required for late disease issues.

We also use seed treatments such as Gaucho for early insect management.

Q How do you manage herbicide resistance?

A We try to use all the tools in the shed for resistance control, including: • Rotating chemical groups throughout the rotations • Sowing break crops which are grazed and sprayed out in the spring • Trying to get good weed control prior to sowing • Using multiple sprays in knockdown • Setting up east-west auto-steer lines to create shadowing on the inter-row to slow growth of weeds Q Tell us about your GPS system.

A We use Trimble GPS systems that are set up with RTK which gives us 2.5cm repeatability

year after year. This enables us to inter-row sow in our full stubble retention system.

We have set up a 3:1 CTF system of 14m and the machinery is set up on 3 metre centres.

We still plant our tracks to minimise weed growth on tracks that aren’t passed by the sprayer or spreader throughout crop growth.

It also stops livestock from walking up these tracks and damaging them.

Q Do you belong to a farm management group?

A We as a farming enterprise are not involved with an outside farm group but we have our own on-farm technical group (Jason, Scott, Paul, John and Elaine). The farm doesn’t use any advisors but seeks a lot of advice from agronomists for cropping and also financial advice from our accountant.

Q What is your harvesting routine?

A Jason drives the harvester and Paul and Scott are truck drivers. We hire one labour unit to

drive the chaser bin and Dad is the gopher.

We have enough storage on farm in sheds and silos to store approximately half our harvest if we want. The amount stored and delivered to sites varies each season.

Q How do you sell/market your crop?

A Marketing of grain varies for our business each year. In recent years we have delivered a large portion of our harvest to local buyers for cash, straight from the paddock.

In our area there are multiple feedlots, poultry farms, a flour mill and numerous private buyers so we have been able to attract a premium price at harvest due to local aggressive buyers trying to secure their stocks.

Lower quality grades that aren’t attracting a good price are stored on-farm and sold into the strong local feed market when the timing is right.

We also use swaps in our marketing strategy as we can take advantage of highs Three generations of the Hamblin family

JULY 2015

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FARM PROFILE / RAVENSTONE

and lows of the world market over multiple seasons without the risk of having to supply physical product.

Q Who do you rely on for grain marketing advice?

A Nowadays with the use of the internet, SMS and emails, grain marketing is made easier.

For us it is a matter of keeping up to date with local, state, national and international markets which can be viewed daily to keep us on top of highs, lows and fluctuations.

Q What are the three biggest challenges/ risks to your farm business and how do you manage them?

A Margins: The ever increasing costs of our inputs while the price of our produce remains relatively stagnant, which continues to cut our margins over time. We have to become better managers to minimise the cost of inputs, while increasing our outputs. Some strategies include buying high volumes of inputs when they are cheaper, splitting fertiliser applications to suit the seasons and making better marketing decisions.

Climate: Making effective management and financial decisions in relation to the current and unknown future climate conditions we may experience. Using

24

multiple weather sites, being more cautious in predicted drier years and more aggressive in predicted wetter years are some of the tactics we use.

Time: Effectively managing a business that will grow and be financially rewarding while also spending plenty of time with our families. We are trying to be more efficient at work (using better machinery assists this) and we aim to only work weekends at harvest and sowing. We work set hours during the week, usually 7.30am-5.30pm.

Q What technological developments do you foresee, which will improve your family farm?

A The NBN will give us greater ability to access information and at a more efficient speed so we will be more connected with relevant information and contacts.

I think robotics and drones in agriculture will open up many new technological developments that will advance the industry.

Q Do you have future expansion plans?

A We hope to increase our land ownership in the local area. We are mainly competing with local buyers in our area but there are some corporate farmers a half an hour’s drive away.

Land prices are still viable under efficient and

effective management.

Would you shift to another district for cheaper land or if rainfall becomes a problem due to climate change?

A We are happy to stay around Ganmain. It is a great community area, our families are from here and our wives’ families are from here too.

Q Do you have a business diversification strategy?

A We have the ability to diversify into contract harvesting, planting or grain carting if the business needs to, as we keep relatively new machinery. However, at the moment we’re not looking to take on contract work.

Q What role does livestock play in your farming business?

A Ravenstone is a mixed farming enterprise but the main focus is certainly on cropping.

Livestock plays an important role in integrated weed management and bio-mass control and it has the added advantage of providing extra non-cropping income.

We run 2300 Merino x Border Leicester ewes. The ewes are joined to White Suffolk rams once a year in a controlled program to enable busy livestock activities to take place at different times to busy cropping activities.

Q

FARM PROFILE / RAVENSTONE

On December 1, White Suffolk rams are joined with the ewes at a rate of 3% for seven weeks. This enables the ewes to have three cycles, which occur approximately every 16 days.

The ewes are crutched and scanned in the second week of March and all the dry ewes are sold on the mutton market.

The ewes tested in lamb are separated into mobs of 250-300 and are placed into lambing paddocks on April 20th for May 1 lambing.

They are provided green paddock feed that has been saved and kept worm free, supplemented with good quality lucerne or wheaten hay in under-cover hay-racks.

Lamb marking starts on June 20 with lambing percentages between 140% and 160% in recent years and weaning occurs 12-14 weeks after May 1.

Shearing takes place in late September. All ewes are shorn and this gives them time to increase their condition before joining again in December.

The top third of the lambs are sold as un-shorn suckers, the remainder are kept with the middle-weight third crutched and the lightest weight third shorn, giving them more time to grow without issues of fly strike.

Q Do you think food production has a good future in Australia?

A Food production has a good future. We need to educate city people more about what farmers do and that we are doing our best to be sustainable while being productive. We are always trying to supply the best product we can.

Q Will you encourage your children to return to the farm?

A We will all encourage our children to do what they want to do, but we will also show them over the school years how interesting and rewarding the agriculture industry is.

Agriculture is an occupation that you have to love - self-motivation is paramount to success.

Q What is your retirement/succession plan?

A Retirement is still a long way off, but with effective time management it will hopefully help us all keep motivated to stay involved in the industry longer.

Succession planning is an ongoing process. As land is acquired the hectares owned individually will increase. The business model we are using, having a pool of machinery and structures and labour units, is making the company more financially viable and very efficient while also giving us a good quality of life.

JULY 2015

Food production has a good future.

We need to educate city people more about what farmers do and that we are doing our best to be sustainable while being productive. We are always trying to supply the best product we can.

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DISEASE MANAGEMENT

DISEASE MANAGEMENT/ GO EARLY AND GO HARD ON GREEN PEACH APHID The surprise agronomic challenge of 2014, Beet Western Yellow Virus (BWYV), is expected to return again this year and canola growers are advised to be vigilant.

D

ue to heavy rainfall in southern Australian cropping regions during February and March, weeds such as volunteer canola, wild radish, wild turnip and marshmallow have been playing host to a number of BWYV strains (and their vector the green peach aphid).

Warm temperatures through autumn provided ideal conditions for aphid population development and agronomists predicted that this could lead to increased aphid flight activity and the potential for another widespread colonisation of canola crops during the growing season.

While canola was hit the hardest by BWYV last year, certain strains of the virus have also been known to infect pulse crops in south-western Australia, New South Wales and South Australia – so the challenge is potentially more widespread in 2015.

Compounding these issues is the problem of insecticide resistance among green peach aphids across Australia, making fast and diligent action among farmers this season even more important.

Vigilant grain growers would have attacked green “bridge” weeds over autumn and prior to sowing and herbicides should have been re-applied after April rainfall to discourage additional weed germination.

Another strategy to limit BWYV is to sow as early in

26

the season as possible and where possible, into standing stubble to reduce aphid colonization on seedlings. The goal is to sow at rates that will achieve an even and uniform plant density that achieves quickest groundcover, to reduce aphid landings.

Farmers have also been advised to use seed treated with a neonicotinoid insecticide, which should protect canola seedlings from early season aphid feeding damage.

The most critical action is to monitor seedling crops for aphids and symptoms of virus before the rosette stage.

Aphids can be difficult to find when their population is low, but are usually located on the underside of the oldest leaves.

The recently released GRDC Crop Aphids Back Pocket Guide will assist in the correct identification.

Before crop closure, green peach aphid populations can be prevented from colonising under the leaves of older canola crops by applying insecticide using appropriate spray technologies.

Five chemical subgroups are registered to control Green Peach Aphids (GPA) in grain crops: carbamates (Group 1A); synthetic pyrethroids (Group 3A); organophosphates (Group 1B); neonicotinoids (Group 4A); and sulfoxaflor (Group 4C).

Paraffinic spray oils are also registered for suppression of GPA.

DISEASE MANAGEMENT

High levels of resistance to carbamates and pyrethroids are now widespread across Australia. Moderate levels of resistance to organophosphates have been observed in many populations, and there is evidence that resistance to neonicotinoids is evolving.

Where GPA is colonising crop margins in the early stages of population development, growers can consider a border spray with an insecticide to prevent/delay the build-up of GPA and to retain beneficial insects.

They should also avoid repeated applications of products from the same insecticide group on GPA and other pests in the same paddock.

It is also advisable not to re-spray a paddock in the same season where a known spray failure has occurred using the same product or another product from the same insecticide group, or if a spray failure has occurred where the cause has not been identified.

Further resistance strategy advice can be obtained from GPA control guidelines developed by the GRDC funded National Insecticide Resistance Management Working Group.

For more information: ipmguidelinesforgrains.com.au

JULY 2015

Vigilant grain growers would have attacked green “bridge� weeds over autumn and prior to sowing and herbicides should have been re-applied after April rainfall to discourage additional weed germination.

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FARM SAFETY

FARM SAFETY / WORDS/ PETER FULLER

OLDER FARMERS AT HIGH RISK While the recent focus by farm safety campaigners has been on children riding quad bikes, there is another high risk group which until now has been overlooked – males over 50.

O

f the 820 deaths across all age groups on farms between 2001 and 2013, people over 50 accounted for 47% of non-intentional deaths and the majority were males.

In a paper presented at last year’s Farmsafe National Conference in Hobart, Tony Lower and Noeline Monaghan from the University of Sydney’s Australian Centre for Agricultural Health and Safety said the most frequent cause of older farmer deaths were farm vehicle accidents.

“Quad bikes and tractor accidents don’t just affect kids – these two categories represented 37% of older farm deaths,” Tony said. “But older farmers die from a range of other farm dangers including animals, workshop equipment and chemicals.

“The average age of Australia’s farmers is now 53 and as they get older they will naturally be a little less agile and flexible. We are not advocating they stop working on farms – physical work keeps older people healthy and is also good for their mental well-being and self esteem.

“However, they do represent a group which is at an increased risk of accidental injury or death so they need to take a few precautions.”

Tony said the Moree-based centre, which has been researching practical health and safety procedures on farms

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for more than 30 years, would like to see a few simple ideas adopted on farms.

“We support the introduction of safe access platforms to tractors to complement the 90% uptake of roll over protection structures over the last decade,” he said.

“Even if it is not compulsory, purchasing or welding your own safe access platform will certainly reduce tractor related injuries.

“There are a other things older farmers can do to avoid farm injuries.

“For example installing a hydraulic lift or crane in the back of a ute will take a lot of the back strain out of day to day jobs.

“Use a low mobile stool when you are in the workshop to save getting up and down – in fact making everything from gates to small machines to augers more mobile with a set of wheels makes good sense.

“We all struggle with failing eye sight which can sometimes lead to injury so why not buy several sets of $2 reading glasses to leave in the ute, tractor and truck so you never have to strain your eyes…or guess when you are reading a label.”

These tips are included in a Making Work easier for Older Farmers Guide, which is available online at farmsafe.org.au

FARM SAFETY

OLDER FARMER DEATHS AGE AND GENDER - 2001 TO 2013.

SOURCE: UNIVERSITY OF SYDNEY

60 50

MALE FEMALE

40 30 20 10 0

50-54

JULY 2015

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

UNKNOWN

We all struggle with failing eye sight which can sometimes lead to injury so why not buy several sets of $2 reading glasses to leave in the ute, tractor and truck so you never have to strain your eyes‌ or guess when you are reading a label.

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FARM SAFETY

OLDER FARMER DEATHS (50+ YEARS.) - 2001 TO 2013.

40

OTHER MOBILE PLANT

50

QUAD BIKES

71

OTHER VEHICLES

137

OTHER CATERGOIRIES

94

TRACTORS SOURCE: UNIVERSITY OF SYDNEY

Coroners enquire about quad bikes The focus on older farmer injuries coincides with two current coronial enquiries into quad bike deaths – one in Queensland which started last year and the other in NSW which started in early 2015. Further coronial enquiries are expected in Tasmania and Victoria this year.

A recent ABC Radio Background Briefing documentary suggested that the key outcome of the coronial enquiries could be a recommendation for compulsory roll bars to be fitted to all quad bikes.

Professor Raphael Grzebieta from the University of NSW Transport and Road Safety Research Team has also suggested that quad bikes should be re-designed with wider wheel bases and over-steer protection to resist the most common roll-over accidents.

However, Bob Sadler from the US Consumer Products Safety Commission said ATV (quad bike) manufacturers in the US have strongly resisted such changes, claiming that roll over accidents were best prevented by driver training.

Manufacturers have also pointed out that roll bars can actually increase the danger to riders who need to shift their weight or stand up while driving, to more effectively control the bike.

Sandler said that as 90% of the world’s ATVs come from the US they have a dominant role in the design market. There are currently 10 million units in the US and there are around 700 fatalities a year.

With the advent of “super” quad bikes – 1000cc machines 30

with independent suspension and top speeds of 120kmh – the risk of death and serious injury is growing.

He said US manufacturers are watching the Australian coronial enquiries closely as any change to laws here could set a legal precedent for American consumers.

As well as calling for design changes Professor Grzebieta is advocating that a shorter term solution might be a star design rating, which will give consumers more information about safety when purchasing a quad bike.

His team has undertaken more than 1000 tests on a range of quad bikes and side by side ATVs and the confidential results which have been presented to the coroner should be available alter this year.

The Australian Centre for Agricultural Health and Safety has joined the demand for crush protection devices (CPDs) on quad bikes.

“But it will be a long time before quad bike safety regulations change, given the entrenched views of manufacturers,” Tony said. “They will keep fighting all the way.

“In the meantime we advocate older farmers purchase side by side ATVs which area easier to get into, have seat belts and ROPS protection and can carry a load or tow small machinery.

“If it’s you life at stake it’s a small price to pay.”

For more information: The Australian Centre for Agricultural Health and Safety P: (02) 6752 8210 E:info@farmsafe.org.au

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COTTON

COTTON/ WORDS/ KATE FULLER

THE SOUTH WILL RISE AGAIN While the plains of northern NSW and southern Queensland have always been the centre of Australia’s cotton industry, in a bid to even out their seasonal production fluctuations and find more reliable sources of irrigation water, cotton growers are heading south.

32

COTTON

T

his southern expansion has seen the construction of three new cotton gins in the Riverina over the last four years, beginning with the establishment of Southern Cotton in the Murrumbidgee Valley in 2012, Auscott’s multimillion-dollar gin, which opened at Hay earlier this year and the $29 million RivCott gin currently under construction at Carrathool.

Cotton was first grown in the Riverina in the 1960s on Ravensworth Station at Hay and Kooba Station at Darlington Point, but production soon ceased due to unreliable access to short season varieties and autumn rains.

Since cotton farming resumed in the Riverina in 2004, local growers have seen crops in the area grow from 6,700ha to 36,000ha in 2015.

Kate O’Callaghan, General Manager of Southern Cotton, an independent gin owned by six grower-directors and one independent shareholder, welcomes the recent expansion into the south, as it enters its fourth year of production in the Murrumbidgee Valley.

“We’re very supportive of the other gins, our main goal is to grow the industry down here, so having more ginning capacity will only support that,” she said.

“There were a number of cotton farmers down here shipping their bales up north, and it just became the obvious next step to start up our own gin in the south.”

There are a number of reasons why this renewed expansion to the south is proving more fruitful this time around. With new drought resistant and heat tolerant varieties of cotton using less water than rice, corn and soybeans, there has been a 40% increase in irrigation productivity in the Australian cotton industry over the past ten years, according to Cotton Australia.

“Cotton has a really good reputation in the Murrumbidgee Valley – in terms of return per megalitre, a lot of farmers are seeing that cotton is double the return, in comparison to some of the other irrigated crop alternatives, such as rice or corn,” Kate said.

Since cotton farming resumed in the Riverina in 2004, local growers have seen crops in the area grow from 6,700ha to 36,000ha in 2015.

Tim Commins, Owner and Director, Kate O’Callaghan, General Manager, and Chris Veness, Gin Manager of Southern Cotton

JULY 2015

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

33

COTTON

Southern Cotton module pad loaded and ready to go.

“Because of the rules of irrigation, you can’t put your whole farm into rice, so some traditional farmers have seen that it fits well to grow both rice and cotton.

“We’re even seeing some farmers swapping from alternative irrigated crops to cotton completely. It’s just another economically viable alternative really.

Peter Tuohey, a cotton farmer and director of Rivcott, the new grower-owned gin at Carrathool, says the gin’s construction is almost complete and ginning for the 2015 cotton season will begin shortly.

“From floating the idea of this gin project in mid 2013, to when construction began in 2014, we’ve had over fifty-five growers invest in Rivcott,” he said.

“This is a reflection of the kind of growth we’re seeing in the region by farmers.”

Peter began planting cotton at Carrathool in 1998 under contract with The Twynam Agricultural Group, but began his own cotton program in 2011.

“Since I’ve been working in the industry, cotton varieties have been

steadily developed by the CSIRO and Cotton Seed Distributors,” he said.

“The new varieties have been enhanced through biotechnology developments from Monsanto and suit our region. This, combined with the drought breaking in October 2010, made the transition to cotton a sound business decision.”

of 150,000 bales by the end of next season.”

Ashley Power, Marketing Director for Auscott – which processes around 20% of the national cotton crop – has been working with Auscott for almost 20 of its 52 years in Australia and is buoyed by the industry’s expansion into southern NSW. “The new facility in Hay is a strategic move to place ourselves where the growth is.”

Auscott’s new gin will have the capacity to process up to 250,000 bales of cotton and will produce around 60-70,000 tonnes of cottonseed a year.

“With every bale of cotton comes a little over a quarter of a tonne of seed, which is used as feed or crushed for oil. It is also exported, mainly to Asia, for the same end uses,” he said.

The move south is not just about more reliable water – it has also been enabled by improved cotton varieties, which can grow the crop in a shorter period of time over the summer.

“New genetically modified varieties produce more cotton per megalitre and

Even though India and China are producing the most cotton they are also big importers especially of the higher quality cotton that we produce. Most of our production goes to China, India, Thailand, Indonesia and Vietnam.

34

Peter also said that corporate investors have recently bought several large properties in the region specifically for cotton production.

“The increased ginning capability will complement the increased production and ensure current and future growers are ginned in a timely manner,” he said.

“We’re expecting to see all southern valley gins processing in excess

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COTTON

AUSTRALIAN COTTON PRODUCTION AND PRODUCTIVITY TOTAL BALES

NOTE: 1 BALE EQUALS 227 KG . SOURCE: COTTON AUSTRALIA 2014

2013/14 (EST)

2011/12

0 2009/10

0 2007/08

2

2005/06

1

2003/04

4

2001/02

2

1999/00

6

1997/98

3

1995/96

8

1993/94

4

1991/92

10

1989/90

5

BALES PER HECTARE

TOTAL BALES (MILLIONS)

12

a shorter season, so it’s opened up the whole southern area for cotton,” he said.

“We’re even seeing cotton in Victoria now, at Lake Boga, just south of Swan Hill.

“There’s been a huge interest in cotton in the south and it’s going to expand significantly in the coming years because of the economics.”

In spite of this rapid growth in the south, Australian cotton production is still relatively small on the world scale.

With around 110 million bales of cotton consumed worldwide each year, Australia produces less than 5%, but our quality is very high.

“The biggest producers in the world are India and China,” Ashley said. “This year they’re forecast to produce about 30 million bales each, so really there’s a lot of room for growth here in Australia.

“Even though India and China are producing the most cotton they are also big importers especially of the higher quality cotton that we produce. Most of our production goes to China, India, Thailand, Indonesia and Vietnam.

“Australia’s point of difference is certainly quality. We produce cotton that is among the best in the world and it is contamination free, because its machine picked and processed.

“It is used in the highest quality

36

BALES PER HA

6

fabrics in the world.”

Ashley says the more efficient machinery being used in cotton spinning factories means demand for our quality product will increase.

“With costs of labour increasing in places like China, albeit from a very low base, the loss of productivity relating to poor quality cotton from their spinning factories will only add to production costs,” Ashley said.

“Using cotton that’s contamination free, that is long and strong will allow spinners to make fine yarns and keep their machinery running with little downtime.

“So Australia is becoming much more competitive at the premium end of the market.”

Ashley says cotton has long been an industry, which has been at the mercy of the weather in northern NSW and Queensland.

“The production in the south promises to provide more reliability to the national crop and boost Australia’s reputation internationally as a consistent supplier of quality cotton,” he said.

“We’re hearing a lot of stories about big yields this year which will make the move worthwhile for the companies and the growers.”

On 6 May the Minister for Agriculture, the Hon. Barnaby Joyce announced the commencement of the Smarter irrigation for profit project, as one of 12 successful Rural R&D for Profit programmes he intends to roll out this year.

The project, which will be led by the Cotton Research and Development Corporation (CRDC) in partnership with Dairy Australia, the Rural Industries Research and Development Corporation (RIRDC), Sugar Research Australia aims to improve the profitability of cotton, dairy, rice and sugar industries by $20,00040,000 per annum.

Along with 16 research and development partners, these industry leaders plan to increase on-farm profitability by integrating new irrigation scheduling and delivery technologies into good irrigation practice, and adopting automated and precision application technologies across all industries.

The CRDC is also a partner in four other projects that have been selected for funding under today’s announcement: • Stimulating private sector extension in Australian agriculture to increase returns from R&D, led by Dairy Australia; • Improved use of seasonal forecasting to increase farmer profitability, led

by RIRDC; • A profitable future for Australian agriculture: Biorefineries for higher-value animal feeds, chemicals, and fuels, led by Sugar Research Australia; and • Consolidating targeted and practical extension services for Australian Farmers and Fishers, led by RIRDC. For more information on this program please visit: agriculture.gov.au

COTTON

COTTON/ COTTON INDUSTRY EXPANSION FOR GLENCORE GRAIN Glencore Grain has been buying and exporting cotton for four years, after entering into the global and Australian cotton market in 2011.

S

tarting out by purchasing cotton direct from growers that had conducted business with the grain accumulation side of Glencore Grain, the company has since dramatically expanded their cotton grower client base, which now ranges from small private enterprises, through to some of the largest agribusinesses in the country. This growth has seen Glencore purchase up to 10% of the Australian crop direct from growers in some of the largest production years in Australian history.

Greg Williams, Southern New South Wales Accumulation Manager based in Wagga Wagga said that the approach Glencore Grain takes to cotton marketing is simple.

“We offer fixed Australian dollar pricing directly to the grower,” Greg said.

“By keeping it simple Glencore Grain is able to work thoroughly within JULY 2015

the market and make fast decisions on purchases.

“This assists Glencore Grain to purchase large volumes of cotton quickly. The company understands that in modern agricultural markets, to win growers’ business, pricing must be competitive and payment reliable.

“Glencore Grain offers financial security, with 12 day end of week payment terms,” he said.

Cotton accumulators for Glencore Grain operate out of three offices across Queensland and New South Wales, ensuring coverage of the entire cotton crop from central Queensland down to the Riverina.

Nick Kelly, Queensland/Northern New South Wales Accumulation Manager and Brendan Adler, Field Officer are located in Toowoomba; Greg Williams, Southern New South Wales Accumulation Manager is based in Wagga Wagga, with a new field officer

joining the team at Narrabri in the coming weeks.

The local team is strongly supported

by Glencore’s international cotton trading team who are based in Rotterdam, Netherlands with further international offices located in the US, Brazil, India and China.

“This global presence ensures our competitiveness within the wider market, which translates into competitive pricing to Australian farmers,” Greg said.

“As one of the largest agricultural commodity exporters out of Australia and an expanding cotton business, we are more than happy to assist new producers with their queries.

“The team can assist with pricing updates and information about how to sell cotton to Glencore Grain. The company ensures an easy, smooth transaction with prompt and secure payment,” he said.

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

37

INDUSTRY SPOTLIGHT

INDUSTRY SPOTLIGHT/

THE LINK BETWEEN SHIP AND SHORE For a nation girt by sea, shipping agents play a little understood but integral role in the Australian grain supply and export chain.

K

evin Tidmas, Glencore Grain’s Export Operations Manager, said that shipping agents speed up the export process, which has a direct benefit to growers.

“Most exporters charter vessels, so the shipping agent plays a vital role in managing the relationship between the exporter, the vessel operator, the port authority and government agencies.

“They manage relationships between all parties involved, particularly Customs, port authorities, terminal owners and, of course, the exporter, to ensure loading at the port happens smoothly and export documentation can be issued as quickly as possible.

This makes for a much more efficient loading operation, enabling more grain to be exported,” Kevin said.

Travis Monson, Managing Director for Monson Agencies Australia says shipping agents are the link between “the ship and the shore”.

“We are the people on the ground, coordinating communication and document flow between all parties, including the port authorities and government agencies to ensure a

38

smooth and efficient port call,” he said.

“There are three key stages involved in facilitating vessel loading in Australia.

“First are the pre-arrival requirements, such as providing estimated port costs, relevant port and berth information and the vessel’s expected schedule.

“We need to fully inform the ship’s Master of all requirements relating to Customs, Department of Agriculture, port and terminal requirements, and ensure the vessel is ready for loading the required cargo, i.e. the holds are cleaned to required standards.

“We then need to advise and update the relevant parties of the vessels impending arrival, including Customs, Department of Agriculture, port authorities, terminals and exporters, and prepare documentation prior to the vessel’s arrival, to ensure there are no delays.”

Once the vessel is in-port, the agent ensures the Master, terminal representatives and stevedores, are all aware of the cargo and vessel requirements.

The agent must also monitor vessel

operations, ensuring the maximum cargo is loaded within the contract tolerance and that maximum drafts are attained for safety.

“Prior to departure we ensure the correct cargo has been loaded and check all documents are completed correctly,” Travis said.

“The service we provide to our customers relies on our local knowledge and expertise. We have an in depth understanding the appropriate regulations and requirements relating to the port area, and have a wide range of relevant contacts to ensure smooth operations.

“Finally, once the ship departs we continue to oversee all documentation and regulations.”

Monson Agencies, which was established in Fremantle in 1981, currently has 21 offices in all major ports in Australia, and provides bulk shipping agency services for a range of commodities including grain, coal, iron ore, alumina, caustic soda, salt and mineral sands.

In 2014, Monson attended to more than 4,000 vessel port calls.

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TECHNOLOGY

TECHNOLOGY / WORDS/ KATE FULLER

FARM ROBOTS WILL CUT COSTS AND BOOST PRODUCTIVITY The big farming question – how to offset the rising cost of inputs such as herbicides, fertiliser and fuel against the need for increased productivity – could well be answered in the next ten years by robot technology.

Once considered space age science fiction, it is likely that robots which target and kill herbicide resistant weeds, deliver accurate doses of fertiliser and fungicide where it is needed and cut fuel costs are now just a few years away.

One of the world’s leading field robot researchers, Professor Salah Sukkarieh, is turning his knowledge of automated technology, gained in the mining and aviation sector, to food production and he is excited about the potential.

Professor of Robotics and Intelligent Systems and Director of Research and 40

Innovation at the Australian Centre for Field Robotics, University of Sydney, Sukkarieh started out working in field robotics 20 years ago.

“My early research was in field robots that work outdoors 24/7 in all weather conditions. Then I became interested in drones, and the contribution they could make to remote sensing applications,” he said.

Sukkarieh is also looking at creating automated mining systems for Rio Tinto and aviation technologies for QANTAS. “Then about ten years ago I was

asked to look at whether drones could be used to protect crops from pests,” he said.

“After receiving some funding from Land and Water Australia, Meat and Livestock Australia and Biosecurity Queensland, NSW and Victoria, we started looking at using aerial systems for remote sensing.

“This was really a data gathering exercise, allowing us to use analytics, algorithms and big data science to tease out the location of invasive pests and the species of crop they were attacking.

“The technology could then be

TECHNOLOGY

extended to look at ground robots for farm applications which could identify crops and detect weeds.

“After speaking with Horticulture Australia we decided that the technology could be best applied in the first instance to tree and vegetable crops where there is some uniformity in rows and layout.”

The results are the Ladybird and Shrimp robots – both sensor robots, which can travel up and down vegetable and tree rows respectively to map crops, detect weeds and spray them. The Ladybird robot won JULY 2015

Professor Sukkarieh the title of Ausveg ‘Researcher of the Year’.

“The Ladybird is so precise it can target the weed from any direction with minimal herbicide use and it can also do mechanical weeding,” Sukkarieh said.

He is now looking at how he can apply this technology to broadacre agriculture.

Working in partnership with Central Queensland farmer and businessman, Andrew Bate, and the Queensland University of Technology, on a joint project funded

The Ladybird is so precise it can target the weed from any direction with minimal herbicide use and it can also do mechanical weeding.

GLENCORE GRAIN | GRAIN BUSINESS MAGAZINE

41

TECHNOLOGY

We see robotics as an enabling technology for agriculture.

The outcome we’re anticipating will be higher food production from existing farmed land and the ability to farm land that is currently too inefficient to be viable.

Andrew Bate from Swarm Farm Robotics

by the Australian Research Council, Sukkarieh helped the team apply robot technology to the grain growing challenge of cutting costs, improving productivity and safety and reducing operational expenses.

Firstly he is interested in reducing the reliance on large tractors in the grain industry.

“The project focussed on seeing how a number of small autonomous robots could be more efficient and effective than a couple of large tractors – particularly when you take into account maintenance costs, fuel efficiency and labour,” Sukkarieh said.

“Tractors may still be needed for harvesting, but if you can reduce the number of passes for herbicide, fungicide and insecticide application there will be a reduction in operational costs and a benefit to the environment with less compaction of the soil.”

Since working with the team, Andrew Bate and his wife Jocie have founded their own agricultural robotics company SwarmFarm Robotics, developing a system that can autonomously perform a number of agronomic tasks in a range of agricultural settings.

42

The ‘swarm’ technology of their robot allows a team of robotic platforms to move about a paddock in a systemised and repeatable way. They can be loaded with tools which perform specific tasks such as sowing seed, targeting and killing weeds and detecting disease.

“The robotic system is more precise than current technologies,” Bate said. “We see robotics as an enabling technology for agriculture. The outcome we’re anticipating will be higher food production from existing farmed land and the ability to farm land that is currently too inefficient to be viable.”

One example of where robotic applications could be extremely advantageous to the grain industry is in the management of herbicide-resistant weeds.

“Tough weeds, that can be difficult to kill, cost the Australian grains industry $200 million every year,” Bate said.

“Small light-weight robots that can traverse fields 24 hours a day, seven days a week, can pluck individual weeds out of the ground or kill them using microwave or laser technology, eliminating the need for a herbicide.

“Robotics will enable new methods of farming that were never possible with

traditional farming equipment.”

Professor Sukkarieh agrees.

“These autonomous robots will take farming to the next level,” Sukkarieh said.

“The main developmental challenge is that there’s no such thing as an average farm or an average farmer.

Everyone has their own farming system and it is therefore costly to customise rigs which suit individual needs.

“There are also operational questions.

How does the farmer change and adapt to new autonomous systems on the farm? Issues such as maintenance, communication to the robots and safety all require new systems.

“It’s not just accepting the technology itself, it’s about educating the user, and giving the farmer control over the robot application,” Sukkarieh said.

“Even if we can bring the cost of robotics down, we will need to figure out how to design units which have clever human machine interfaces, so they’re ready for anyone to use.”

“But like everything in agriculture adoption is the biggest challenge. Once farmers can see the cost savings and agronomic benefits demonstrated, we will see more robots on farms.”

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