Grain Business Magazine - July 2014

july 2014

Produced for the benefit of Australian grain growers by

Northern hemisphere grain production remains steady Stock feed opportunity fuels Asian appetite yield/ Wheat breeding holds the answer to productivity increase

Supply chain management/ Container exports open market opportunities

cover story/ Farm profile: Blue Hills, Narrabri

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july 2014

Produced for the benefit of Australian grain growers by

01 02 04 06 14 20 22 26

foreword/ Payment security from global strength grain market update/ Northern hemisphere grain production remains steady grain market update/ Australian grain production and consumption

stock feed/ STOCK FEED OPPORTUNITY GROWS AS AUSTRALIA FUELS ASIAN APPETITE

yield/ Wheat breeding holds the answer to productivity increase yield/ New horizons for soil health

supply chain management/ Container exports open market opportunities

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

27 29 32 39 42 44 46

Industry Spotlight/ a good trade

quality management/ KEEPING AN EYE ON OFF-LABEL CHEMICAL USE

farm profile/ blue hills

farm safety/ Safety focus paying off

crop nutrition/ BETTER PHOSPHORUS MANAGEMENT WILL CUT FERTILISER BILLS disease management/ Fungal focus for decision tools cotton industry/ Growers driving cotton research

supply chain management/ Study finds export grain costs down

Š 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 gbm@glencoregrain.com.au Design & Production fuller.com.au

Advertising Rebecca Long, RKL Media.

T: (08) 8843 0059 M: 0417 813 480 rebecca@rklmedia.com.au Cover note Ian Gourley, Blue Hills, Narrabri.

Cover PHOTO: Shanna Whan, SKW Images

Backed by the global strength of the Glencore business with revenue of $239 billion and a network of more than 90 offices in over 50 countries Buying and exporting over 6 million tonnes of Australian grain a year World class bulk export and container packing operations with more than 10 million tonnes of storage Employing 2000 people in regional Australia

www.glencoregrain.com.au | www.viterra.com.au

foreword

foreword/

David Mattiske Managing Director Glencore Grain

Payment security from global strength The winter cropping season is progressing well across most of Australia with timely rainfall across Western Australia, South Australia, Victoria and southern New South Wales. Northern New South Wales and Queensland are still in need of more rain to progress their winter crops and establish a base for their summer crops.

As growers start to consider which companies they sell their grain to, it’s important to research the financial security of the company. Does the company have a strong balance sheet; are they backed by physical assets?

Glencore Grain is backed by the strength of the global Glencore business. The company’s global revenue last year was $US239 billion and has a market cap of $US70 billion.

Growers can guarantee they will be paid when they sell to Glencore Grain. We are also offering growers 12 days end of week payment terms for all grain sold from approved bulk handlers.

We have a local team in all key grain regions that can assist with your grain marketing needs.

As well as buying grain, oilseeds and pulses directly from growers, we are also significant buyers of cotton.

With cotton being an integral part of cropping rotations in northern New South Wales and Queensland, we’ve included an article exploring the opportunities associated with dryland cotton.

We’ve continued to see strong grain exports from Australia as stock levels draw down before the coming harvest.

The benefits of Australia’s bulk supply chains and the value they provide to july 2014

growers cannot be underestimated.

They are extremely efficient at moving grain from the areas of production to the point of domestic consumption or export, ensuring Australian grain is competitive in the international markets and meets the customers’ specific needs.

In this edition of Grain Business, we continue to focus on the key areas of interest identified by growers – global and domestic market information, increasing yields, chemical use and disease management. We take a look at the domestic stock feed market and talk to one of Australia’s largest feedlotters about the quality specifications they require. Safety is one of the most critical issues for our industry and regional communities and we focus on the positive news of decreasing rates of injury and death in agriculture.

The key is to be aware of the risks and vigilant in managing them. We all want everyone home safely every day.

David Mattiske Managing Director, Glencore Grain. | grain business magazine

01

grain market update

grain market update/ words/ Philip Hughes, Trading Manager, Glencore Grain

Northern hemisphere grain production remains steady

Beneficial weather conditions across the northern hemisphere will bolster global grain production in 2014.

02

Cereals fter a slow start US crop conditions are improving, alleviating concerns about global corn and wheat production.

The US winter wheat crop was boosted by late season rain and harvest is progressing despite being a couple of weeks late. US and Canada spring wheat planting was slow to progress in April and May however caught up in June and is expected to be fully planted.

The United States Department of Agriculture (USDA) is forecasting global wheat production in 2014/15 will be down from last year’s record 714 million tonnes (mmt) to 705 mmt.

However, consumption is also expected to fall and be slightly lower than production at 700 mmt so global stocks to use ratio will remain at a comfortable 27 per cent, with Argentina and Canada in particular carrying high stocks.

The Ukrainian political situation appears to have stabilised and should allow grain to be available for export in the coming months. The USDA is forecasting a two million tonne increase in wheat exports from Russia but a two million tonne decrease in exports from Kazakhstan and a one million tonne decrease from the Ukraine to 20 mmt, six mmt and nine mmt respectively.

Globally, corn production is forecast to be 981 mmt, slightly larger than last year’s record. Consumption is expected to increase 17 mmt to 966 mmt, which still allows for global stocks to rebuild to a stocks to use ratio of 20 per cent.

At the beginning of July, conditions for the majority of the US corn crop were rated good to excellent, one of the highest ratings experienced so early in the season. While the planted area is slightly down, conditions should produce good yields and there is potential for a record crop for the second consecutive year.

Global barley production is expected to fall nearly 10 per cent year on year, with the USDA forecasting production of 132 million tonnes in 2014/15. Production in the northern hemisphere is expected to return to average levels following

A

grain market update

a large crop last year. Consumption is also expected to fall due to the availability of competing feed grains. However, consumption is only predicted to fall by four per cent to 136 million tonnes meaning that global stock levels will tighten to 14 per cent stocks to use, a 25 per cent reduction on 2013/14 stock levels and the lowest level in more than eight years. Consumption and imports into China is expected to be stable this year for both malt and feed requirements.

Australia’s 2014 sorghum production has been impacted by drought conditions in the growing regions of northern New South Wales and Queensland. The lack of production will see most of the 2014 crop consumed domestically, leading to a lack of sorghum available for export. Both container and bulk exports are down approximately 60 per cent year on year.

Consumption of sorghum in domestic stockfeed markets has been lower in recent months with interstate imports of feed barley into New South Wales and Queensland; however with the 2014 crop now harvested interstate imports should decrease.

Winter and spring rains will influence the area planted and the size of the crop produced in 2015. In the meantime the winter crop production will determine the domestic stockfeed supply levels for the remainder of the year.

Oilseeds Global canola production is expected to be high again this year with big crops forecast in the key production regions of Europe, Canada and Australia.

Global canola consumption is expected to be down year on year as demand for meal and oil decreases and crush margins remain negative through China and Europe.

Demand for soybeans and soymeal continues to be strong.

Despite record global production last year, soybean stocks in the US are very tight and China is importing record volumes to keep pace with record consumption. According to the USDA, China consumed 80 mmt of soybeans in 2013/14, up four million tonnes on 2012/13, and it’s expected to increase

another five million tonnes in 2014/15 to 85 million tonnes.

Global soybean production in 2014/15 is forecast to be another record according to the USDA with total production potentially breaking 300mmt for the first time, with record crops expected in US and South America. Between end of April and end of May the US soybean crop for 2014/15 went from four per cent planted to 75 per cent planted and is now on-par with the five year average. Global consumption is also set to rise to 283mmt which will see global stock levels rebuilt to a stocks to use ratio of 30 per cent.

Pulses Demand in Australia’s key pulses export markets continues to be volatile and the markets are relatively illiquid. Political instability in Pakistan and political elections in India are impacting on end-users’ appetite to import lentils and overall demand for chickpeas, lentils and peas has been lower recently with the annual Ramadan (a month of fasting observed by Muslims).

On the production side, Canada’s lentil crops have been planted and growing conditions have been favourable.

Logistical constraints experienced in Canada last harvest are improving and new crop exports to Turkey and India have been secured. The Indian lentil harvest has been affected by poor weather and in the coming months, the developing El Nino weather pattern has the potential to affect the Indian monsoon and their winter crop production.

At the beginning of July, conditions for the majority of the US corn crop were rated good to excellent, one of the highest ratings experienced so early in the season.

Source: USDA , World Agricultural Supply and Demand Estimates; July 2014. july 2014

| grain business magazine

03

grain market update

grain market update/

Australian grain production and consumption Based on an average year of production and consumption, for the major commodities of wheat, barley and canola, Australia produces 36 million tonnes, domestically consumes 12 million tonnes and exports 24 million tonnes.

However, in the eastern states (VIC, NSW, QLD) production is approximately 17 million tonnes with more than half of the total production consumed domestically (nine million tonnes) leaving just eight million tonnes for export. The high domestic consumption is due to more than 80 per cent of Australia’s total livestock production occurring in these states as well as more than 80 per cent of Australia’s population living on the eastern seaboard. In years when the eastern states have production issues, those grain markets can be quite volatile as the proportion of grain available for export falls. For example, in 2013/14 production was approximately four million tonnes below the average, reducing the grain available for export to only four million tonnes.

In contrast, SA and WA combined produce 20 million tonnes and only 15 per cent is consumed domestically (three million tonnes); 17 million tonnes is exported internationally.

Western Australia

Australia total WHEAT

(mmt)

25 -7 18

Production Domestic Consumption International Export

BARLEY

(mmt)

8 -3.8 4.2

CANOLA

(mmt)

TOTAL

3.2 -1 2.2

WHEAT(mmt) BARLEY (mmt) CANOLA (mmt)

(mmt)

36.2 -11.8 24.4

Production Domestic Consumption interstate Transfers International Export

8.5 -0.5 0 8

sa/wa total WHEAT(mmt) BARLEY (mmt) CANOLA (mmt)

13 -1.2 0.1 11.9

1.8 -0.2 0 1.6

19.5 -2.7 0.1 16.9

WHEAT(mmt) BARLEY (mmt) CANOLA (mmt)

TOTAL (mmt)

Production Domestic Consumption interstate Transfers International Export

4.7 -1.3 0 3.4

TOTAL (mmt)

east coast total Production Domestic Consumption interstate Transfers International Export

12 -5.8 -0.1 6.1

3.3 -2.5 0 0.8

1.4 -0.8 0 0.6

Statistics based on an average year of production. All data measured in million metric tonnes.

04

16.7 -9.1 -0.1 7.5

WHEAT

barley

canola

2.7 -0.7 0 2

1.4 -0.1 0 1.3

TOTAL (mmt)

12.6 -1.3 0 11.3

grain market update

queensland WHEAT(mmt) BARLEY (mmt) CANOLA (mmt)

1.5 -1.2 0.8 1.1

0 0 0 0

1.7 -1.7 1.1 1.1

WHEAT(mmt) BARLEY (mmt) CANOLA (mmt)

TOTAL (mmt)

Production Domestic Consumption interstate Transfers

south Australia WHEAT(mmt) BARLEY (mmt) CANOLA (mmt) Production Domestic Consumption interstate Transfers International Export

4.5 -0.7 0.1 3.9

2 -0.6 0 1.4

0t 3 0 0 , 0 0 o nne s

0t 8 0 0 , 0 0 o nne s

International Export

0.2 -0.5 0.3 0

TOTAL (mmt)

TOTAL (mmt)

0.4 -0.1 0 0.3

6.9 -1.4 0.1 5.6

new south wales Production Domestic Consumption interstate Transfers International Export

7 -2.8 -1.6 2.6

1.4 -0.8 -0.5 0.1

0.7 -0.4 -0.1 0.2

9.1 -4 -2.2 2.9

00 t 100 ,0

00 t 100 ,0

80 0

s

,0 0 0

nne

t o nn

o nne s

es

0 to

o nne s

0 100,0

victoria WHEAT(mmt) BARLEY (mmt) CANOLA (mmt) Production Domestic Consumption interstate Transfers International Export july 2014

3.5 -1.8 0.7 2.4

1.7 -1.2 0.2 0.7

0.7 -0.4 0.1 0.4

TOTAL (mmt)

5.9 -3.4 1 3.5 | grain business magazine

05

STOCK FEED

STOCK FEED/ WORDS/ Peter Fuller

STOCK FEED OPPORTUNITY GROWS AS AUSTRALIA FUELS ASIAN APPETITE Strong Asian demand for lot fed Australian beef and dairy products such as butter, milk and cheese – backed up by a domestic love affair with chicken – means the outlook for Australia’s feed grain producers has never been better.

06

STOCK FEED

Left: Mort & Co cattle yards at Grassdale.

T

hat’s the view of John Spragg from the Stock Feed Manufacturer’s Council of Australia, who said supplying wheat, barley, oats and other grains to the stock feed industry was now an important and very viable income alternative to export, for Australian grain farmers.

“Following the drought in Queensland and northern NSW there is a severe shortage of stock feed in the eastern states which has put prices over export levels,” he said.

Australia’s intensive livestock producers consume around 12 million tonnes of stock feed a year, or around 30 per cent of the national grain crop, depending on seasonal variations.

“Stock feed was seen as the poor cousin in the past,” John said. “It was the market for downgraded grain, for the leftovers.

“But the drought has certainly spiked demand and woken up interest from farmers who are now supplying feedlots with milling quality wheat and malting barley.

John said the Australian Milling Conference held on the Gold Coast in May confirmed that the demand for stock feed would be sustained for the medium to long term.

“This is not a flash in the pan,” he said.

“The voracious demand for animal protein – beef, chicken and dairy foods – from Asia is based on the increasing affluence of young professionals and the subsequent Westernisation of their diet, and that is not going to change.

“They will source animal protein from the US or Brazil if they can’t get it from Australia.

“It also means that there will be a viable feed grain export industry in the future as Asian livestock producers expand production.

“More than ever before, the feed july 2014

market can provide growers with stability, consistency and predictability of cash flow and a simplified, cost efficient handling and delivery system.”

The other driver of feed grain demand in Australia has been the low levels of grain stockpiled between harvests.

John said prior to deregulation the Australian Wheat Board was charged with the responsibility of holding grain back in case of drought.

“Now exporters get everything onto a ship as quickly as they can,” he said. “There is very little left between seasons and this means there is no grain available for feed.

“This does present a risk in the case of a drought. For example eastern states feedlots are bringing in grain from WA and SA now because they have run out.”

John said farmers in high rainfall areas where yields were high should seriously consider devoting more of their crop to feed grain.

“We would love to see more dedicated growers and more dedicated feed grains such as triticale, lupins, sorghum, oats and peas.

“Most grain growers simply focus on wheat, barley or canola. But there is an ethical question about whether we should be feeding grains that are grown for humans to animals.

“If we could get grain breeders interested in producing high yielding feed cereals, there would be big opportunities for specialist feed grain producers.”

John said this was particularly the case as many grain growers were now more experienced at direct marketing and customer service and had also invested in on-farm storage.

“Today’s grain grower is much more flexible and open to diversification and the feed industry presents a great alternative,” John said. | grain business magazine

07

STOCK FEED

FEED USED

BY INDUSTRY

8%

layer

23%

4%

23%

3%

23%

2%

14%

0.5%

DAIRY

beef

poultry

pig

sheep

horse

0ther

aquaculture

Above: Testing steam flaked sourghum for conformance to milling parameters

Beef, Dairy, Chicken demand strong Feed demand by livestock commodities in Australia is fairly evenly split between beef (23 per cent), dairy (23 per cent) and poultry meat (23 per cent) with pork running at a distinct fourth (14 per cent).

Egg production (eight per cent), sheep (four per cent) and horses (three per cent) make up the other major sectors with aquaculture (0.5 per cent) a small but growing segment.

Beef The beef industry has a particularly positive outlook with the Australian Lot Feeders’ Association and Meat & Livestock Australia reporting that cattle numbers in feedlots had risen eight percent (63,000 head) between December 2013 and the end of March, to a total of 873,800 head.

08

That’s the highest number seen since December 2006, and is well above the five year average of 700,000 to 800,000 head in feedlots.

The figures were a response to the numbers of stock being turned off during summer as a result of the drought in Queensland and NSW, and won’t reflect the impact of rains experienced in March.

Nevertheless, Australian beef has now developed an excellent reputation for quality, especially in Japan, USA, China and South Korea, and sales growth due to a low Australian dollar, suggests the current high demand for stock feed by cattle feedlots will be sustained in the medium to longer term.

Dairy While the national dairy herd remains static, dairy production

continues to rise largely as a result of the correlation between grain feeding and lactation. Grain feeding has become an essential component in dairy farming systems due to less reliable pasture production due to drought and irrigation water costs, increased intensification with larger herds and more automatic feed systems.

Barley and wheat are the major grains used, but some producers favour triticale, oats and maize. In Queensland and northern NSW sorghum is used once prices are favourable relative to wheat and barley price.

Exports, now more than 50 per cent of Australian dairy production, continue to grow.

While export volumes of dairy produce were down by 8.5 per cent in the March quarter, the value of exports was up 20.2 per cent during the same period, driven largely by butter, cheddar

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STOCK FEED

cheese and skim milk and whole milk powder exports.

Growing incomes, changing Western style diet and Australia’s geographic proximity accounted for $2 billion in dairy product sales to Asia in the last year – with Japan the largest single consumer at $511 million. Greater China (China, Hong Kong and Macau) is expected to drive a 15 per cent increase in dairy product sales next year.

The dairy industry is also strong in domestic terms. Although consumer sentiment remains cautious and retailer competition continues to affect margins, milk sales remain stable and yoghurt, in particular is showing year on year increases due to its association with a natural, healthy lifestyle.

Poultry While the poultry feed category includes duck, geese and quail, the Australian consumer’s insatiable taste for chicken, continues to dominate the poultry industry.

Chicken is far and away the most consumed meat in Australia, making up 25 per cent of meat sales, up from 18 per cent a decade ago. Over the past decade chicken meat production has grown at around four per cent a year to around 1.05 million tonnes in 2012/13, with nearly all of this consumed domestically.

Growth is expected to rise at around three per cent per year with chicken meat production predicted to hit 1.25 million tonnes by 2018/19.

The Australian chicken meat industry is highly integrated, operating its own feed mills or having feed manufactured under contract supply arrangements. The industry has a high reliance upon accessing wheat in all production regions and sorghum in eastern states. Other grains are used

10

subject to availability, price and quality.

Australians are the fourth largest consumers of chicken meat in the world – behind Saudia Arabia, Malaysia and Brazil – and this doesn’t seem likely to change as Asian and Middle Eastern migration grows in Australia and home cooking and restaurant menus embrace chicken-based Asian dishes.

Pork ABARES reported in February that the outlook for Australian pork production was at last on the rise.

The high Australian dollar has opened the door for pork imports to Australia in recent years, with Canadian, Danish and American pork shipments growing by 22 per cent, adding up to about half of the pork consumed in Australia.

But the lower dollar could change all that, enabling pork producers to rebuild and claw back market share in this largely domestic consumption industry. Australia produced 325,000 tonnes of pig meat in 2007/08 (Source ABS), most of which is consumed locally as fresh pork.

Pork continues to be the most consumed meat in the world at 38 per cent (compared with chicken at 33 per cent) so there is enormous opportunity for Asian exports of pork albeit at a competitive price.

The pig industry is feed price sensitive and has contracted to a smaller number of large scale pig operations, with a shift from family controlled to corporate farming ownership. The majority of feed is supplied by a small number of feed milling sites. Major grains in use are wheat and barley, with triticale and sorghum being used in lesser volumes.

STOCK FEED

More than ever before, the feed market can provide growers with stability, consistency and predictability of cash flow and a simplified, cost efficient handling and delivery system.

july 2014

| grain business magazine

11

STOCK FEED

BIG FEEDLOTTER SAYS ALL SYSTEMS GO Although numbers of cattle in Australian feedlots will rise and fall seasonally, the longer term trend for feedlot and stock feed demand will continue to be strong, according to one of Australia’s biggest single buyers.

Mort & Co is Australia’s second largest beef cattle lot feeder, turning out in excess of 150,000 head of cattle a year.

The company’s feedlots, located at Dalby and Milmerran in south east Queensland and Delungra in northern NSW consume more than 250,000 tonnes of grains, roughages, proteins and other feed commodities every year, purchasing direct from growers as well as through the trade and brokering channels.

“Mort & Co is essentially a supply chain business”, says Group Feedlots Manager, Scott Braund.

“The business maintains strategic relationships with domestic and international processors to whom we market our grain fed livestock.

“Livestock are supplied into our feedlot operations through a range of options including direct purchasing, investor funding, and grazier retained ownership programs.

“Lot feeding is a specialised business that requires supplying a consistent product to customers – that’s what we aim to do best,” he says.

Scott says the number one priority for the lot feeding industry is food safety.

“We are in a position where we need to guarantee the safety of the product we sell,” he says.

The industry’s independently audited Quality Assurance system, the National Feedlot

Mort & Co feedmill, Grassdale 12

Accreditation Scheme (NFAS) provides the basis for this guarantee.

NFAS includes the requirement for lot feeders to manage the residue risks associated with the feed commodities they purchase.

“In practical terms this means that vendors of feed commodities must able to guarantee the product they are supplying to feedlots is free from residue,” Scott says.

“This is normally achieved through the use of a Safemeat Commodity Vendor Declaration (CVD) in commodity transactions.

“Historically the grains industry has shown variable uptake of being willing and able suppliers of CVD’s but this is improving as the supply chain has become more sophisticated and able to cater for these types of requirements.

“Hopefully in the future we shall see industry wide adoption of an independently audited QA system addressing food safety requirements,” Scott says.

According to Scott, feedlot diets are usually formulated around nutritional requirements.

“Grain is relied on to contribute energy and therefore purchasing decisions are generally based on a least cost of energy calculation,” he says.

“Feedlots are concerned with the weight and screenings content of grain because these are an indication of the product’s energy content and what we are physically dealing with from a milling perspective,” Scott says.

“We are not as concerned with protein levels, because there are normally cheaper sources of protein than grain that we can access.

Scott says SFW1 wheat (or better) is

preferred over Fed1 grade at Mort & Co for weight (energy) reasons and because of the more strict contamination specifications associated with SFW1 over Fed1.

Every load is sampled and tested for compliance to applicable Grain Trade Australia (GTA) specifications at Mort & Co Feedlots.

Depending on the commodity markets at the time and the nutritional parameters being targeted, Mort & Co regularly purchase the following feed commodities at the specification listed below: • Wheat - minimum SFW1 specification • Barley - minimum FB1 specification • Sorghum – minimum Sorg 1 specification • White cotton seed • Lucerne hay • Cereal straw • Winter and summer crop silages Mort & Co aims to purchase its feed commodities from local producers where possible. Feed commodity business is transacted with normal GTA conditions over the feedlot’s registered weighbridges and payment terms are 30 days from the end of the week of delivery.

Scott said that growing demand from Asian markets, consistent domestic demand and short supplies of US beef were the main factors influencing the short to medium term outlook.

“Currency is unfortunately working against us and it’s likely we will see tightening in cattle supply numbers.

“From a positive perspective, meat markets are generally strong, translating into reasonable finished cattle prices, so it’s all systems go at this point,” he says.

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Yield/

words/ Peter Fuller

Wheat breeding holds the answer to productivity increase A 10.4 tonne/ha, Trojan wheat crop in Western Victoria last year may provide a new target for Australia’s grain growers who are being challenged to meet the appetites of a hungry Westernising Asia.

yield

A

lthough the astounding yield was achieved in ideal conditions with optimal nitrogen applications and excellent rainfall, it set a new Australian dryland benchmark.

So the question is, will the unprecedented demand for grain drive unprecedented levels of productivity, which would normally only be achieved in high rainfall agricultural environments such as the UK, Europe or New Zealand?

As one of Australia’s leading dryland agronomists, Dr Allan Mayfield has a long range view of the last 40 years in agriculture.

He believes that while the giant steps made in both yield and quality since the 1970s will be difficult to repeat in the next 20 to 30 years, science will keep producing valuable incremental gains especially as a result of grain breeding.

“Our improvements in water use efficiency have been a major contributor to yield,” he said.

“We have made serious inroads into the control of root diseases, such as cereal cyst nematode, through growing resistant varieties and with other root diseases through grass control in rotations.

“Compared to 30 years ago we now have much greater access to a wider range of herbicides to control weeds and are seeing a much better response to fertiliser, in particular nitrogen.

“We are also using rotations more effectively to boost yields and that coupled with the seeding system developments in the 1990s – in particular direct drilling with retention of residues – has led to more reliable crop emergence and improved soil health.

“Our soils in 2014 as a general rule, provide much better water infiltration, crop emergence and nutrient turnover, than the same soils in the 1970s.

Farmers are sowing earlier and can

july 2014

seed dry now, if need be, much more reliably than they could then.”

Despite these excellent achievements by agronomists and farmers working together, they were not without their challenges, Allan said.

“For example herbicides have revolutionised weed control, but we now have herbicide resistance to deal with.

“Using direct drilling systems and residue retention has improved soil organic matter and water infiltration but we have seen an increase in some pests, such as slugs, snails and mice.

“We have also increased the incidence of crown rot, especially in intensive cereal cropping systems.

“For every advance it seems there can be a new challenge.”

Allan says plant breeding is continuing to make a great impact, particularly with the release of better adapted varieties, and these advances are likely to continue into the future.

“As breeders reduce the time it takes to release new varieties to market, growers will have greater opportunities to improve both yield and quality,” he said.

“In the past it took 14 years to commercialisation and now it’s 10 or less from breeding through to commercialisation.”

General Manager of Research and Development at Australian Grain Technologies, Haydn Kuchel said that producing high yielding varieties was an international priority in plant breeding circles.

“We have recently seen the establishment of the International Wheat Yield Consortium, which is a concerted effort to raise the bar in breeding,” he said.

“With the world’s population increasing and the amount of arable land reducing, there are international groups forming to look at how can we

| grain business magazine

15

yield

lift the yield of crops to alleviate this supply and demand problem,” he said.

“We also have a middle class in Asia wanting to eat high quality wheat products, so there is increased demand for premium quality wheat from new markets.

“So the question everyone is asking is, how can we achieve high rates of genetic gains in yield that will meet the demands of the future?”

Haydn said better investment in the wheat breeding industry had led to the greatest gains.

“One of the biggest impacts in Australia was when wheat breeding went private. Since privatisation in the early 2000s we have seen huge advances in the industry.

“If we look at the last 15 years in southern Australia alone, we’ve seen a nearly one per cent annual genetic gain in yield, which is well above the long term average.

“The same situation occurred in the US with corn from the middle of the 20th century. Corn yields took off when hybrid

Above: AGT wheat research plots at Roseworthy College. Photos courtesy of Stuart Milde, Australian Grain Technologies.

16

corn was developed, which promoted greater investment in breeding. They have seen huge gains in yield due to investment in plant breeding,” he said.

Haydn said the rates of genetic gains were improving in Australia.

“That’s partly because there has been greater investment in breeding, and partly because the technology is available to allow us to do things better.

“For example, in the last two months we have generated more molecular data than in our company’s entire history.”

The key for breeders, Haydn said, was to reduce the time between one cross breed to another.

“We need to identify the next best parent as quickly as possible. We have brought that time down by 50 per cent in the last 10 years,” he said.

“The genetic information available to us now is thousands upon thousands more than 20 years ago. It’s likely that we will know every sequence in every wheat gene in every variety in just five to 10 years.”

Haydn said breeders looked to growers

to determine the traits needed by future crop varieties.

“It has to be growers that set our breeding objectives because that’s who we’re serving. Our objectives around quality are also up to the grower.

What’s in their best interest is in our best interest.”

He said feedback from farmers indicated a shift away from a focus on foliar disease, because management costs had reduced.

“Farmers are wanting varieties that suit their farming system, which has changed a lot over time.

“They are putting crops in earlier than they used to because they don’t have to till, there appears to have been a shift in rain patterns, and with an increase in stubble retention they want varieties that have improved resistance to stubble borne disease.

“A lot of farmers are now trying to manage their risk profile in addition to profitability so are looking for varieties that don’t pose unnecessary down grading at harvest time.

Our improvements in water use efficiency have been a major contributor to yield.

yield

“The last thing a grower wants is to grow a healthy crop and get a poor price for it due to disease or damage that occurred at harvest or in storage that was out of their control.”

But overall, growers were still looking for improvements in yield.

“Yield is always number one,” Haydn said.

“Which is why we are constantly increasing our investment in breeding for yield by employing new technology, to ensure every dollar we invest has a return for farmers.”

Haydn said farmers were keen to know when AGT was going to breed the next Mace: the next yield king.

“Each year, we test new potential wheat varieties at 45 locations around the country.

“More than 250,000 yield plots are grown each year, looking for that one special combination of genetics that ticks all of the boxes for growers,” he said.

Haydn said AGT relied on feedback from farmers to inform its breeding priorities.

Above: AGT plant breeding trials in the glasshouse. Photos courtesy of Stuart Milde, Australian Grain Technologies.

18

“We are always talking to farmers, at field days, through agronomists, and now through social media such as Twitter.

“Farmers are adopting to new technologies quickly. Twitter is one of the best ways you can tap into what growers are talking about.”

Last year AGT was able to investigate an issue with one of its varieties following a grower post on Twitter.

“Someone was talking about a crop going yellow and we realised it was one of our varieties, so we got in touch with him straight away and went out to see what was going on.”

Haydn said social media was becoming an essential tool for staying abreast of grower issues.

“Farmers are always conversing with each other on Twitter and the great thing about it is it’s ‘outside in’ – it’s like the front bar chat on your phone.

“You can be a fly on the wall, or you can participate in a conversation.

Australia is a big place, it’s impossible to get around and talk to everyone face to face.”

Making more out of Mace

A joint initiative between Australian Grain Technologies and agronomists in WA, SA and Victoria aims to improve the productivity of the popular wheat variety, Mace, by matching agronomic practices to Mace’s specific performance.

Mace, which in 2014 accounts for more than 50 per cent of the crop in SA and WA, is known by growers as “the best way to make money out of wheat” due to its ability to produce high yields.

But an independent agronomy and breeding researcher from Esperance, believes there is potential for growers to get an even bigger boost in productivity and profitability from Mace’s genetics, if its management is tailored to its particular attributes.

AGT is working with agronomists to investigate this possibility, with trials planted at 10 locations from northern WA through to the Wimmera in Victoria that will examine: • Time of sowing • Seeding rate • Fungicide application • Nitrogen application • Trace element application Results of the trials will be available in 2015.

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yield

Yield is king

Choosing a wheat variety based on protein rather than yield, is false economy.

That’s the view of AGT Territory Manager (NSW/ Queensland) Kerrie Gleeson who said yield continues to be king, in profitability terms.

Kerrie said a string of low protein seasons in NSW had led some growers to switch to lower yielding – higher protein varieties to improve their chance of achieving Australian Prime Hard (APH).

“But growers need to understand that nitrogen is the major component of protein and varieties grown under the same conditions have access to the same amount of nitrogen,” Kerrie said.

“With higher yielding varieties this nitrogen is distributed across larger grain or a higher volume of grain which is known as the nitrogen or protein dilution effect.

“Any management change, including change of variety, that increases grain yield but at the same time fails to increase total available nitrogen through fertiliser or rotation crops, will result in lower protein.”

Kerrie said a review of every main season wheat variety in the National Variety Trial (NVT) from 2010 to 2013 showed that the highest yielding APH variety also consistently achieved the highest gross returns.

The highest yielding and lowest protein achieving variety Suntop consistently produced higher financial returns than the highest protein achieving variety Spitfire: $75/ha higher return in southern NSW; $43/ha higher return in northern NSW and $59/ha higher return across all NSW. “In fact Suntop consistently produced higher returns than Spitfire despite being 31 per cent less likely to achieve the APH grade.

“Another low protein achieving variety, EGA Gregory, returned the second highest gross returns overall.

“Overall growers aiming to achieve consistently high financial returns need to go for yield first,” Kerrie said.

20

Table 1. Gross return ($) from APH varieties in southern NSW NVTs (2010-2013).

Variety

2010

2011

2012

2013

4 year average

Crusader

987

959

792

908

912

EGA Gregory

1242

1031

920

876

1020

Spitfire

1251

994

830

906

997

Suntop

1320

1052

971

935

1072

Sunvale

1170

989

899

833

975

# NVTs

13

13

13

12

51

Best Return

Suntop

Suntop

Suntop

Suntop

Suntop

$ Advantage

$69/ha

$21/ha

$51/ha

$27/ha

$52/ha

Table 2. Gross return ($) from APH varieties in northern NSW NVTs(2010-2013).

Variety

2010

2011

2012

2013

4 year average

Crusader

1079

960

666

708

850

EGA Gregory

1198

1110

718

729

935

Spitfire

1181

1090

694

744

923

Suntop

1280

1082

766

751

966

Sunvale

1096

1015

677

697

868

# NVTs

13

13

14

13

53

Best Return

Suntop

EGA Gregory

Suntop

Suntop

Suntop

$ Advantage

$82/ha

$20/ha

$48/ha

$7/ha

$31/ha

Table 3. Mean yield, protein and gross return ($) for APH varieties in NSW NVTs 2010-2013 (104 trials).

Variety

Yield (t/ha)

Protein (per cent)

Gross Return ($)

Crusader

3.42

12.7

880

EGA Gregory

3.87

11.9

977

Spitfire

3.70

13.1

959

Suntop

4.05

11.8

1018

Sunvale

3.56

12.8

921

$ Advantage of Suntop over next best variety

$41/ha

‘Yield is king’: Data supplied by Australian Grain Technologies. Disclaimer: The information contained in this article is based on the knowledge and understanding of AGT at the time of writing. Growers should be aware of the need to regularly consult with advisors on local conditions and currency of information.

yield

yield/ New horizons for soil health Broad-acre farmers can learn how to improve soil performance to achieve higher yields thanks to a project aiming to unlock the full rainfall potential of sandy and sodic soils.

Above: Pharris delver.

R

esearchers from University of Adelaide, UniSA, the South Australian Research and Development Institute (SARDI) and Rural Solutions SA have discovered that innovations in soil management can lead to an increase in soil productivity of as much as 200 per cent, with the average increase around 70 per cent.

The New Horizons project, driven by PIRSA’s Rural Solutions SA, has three demonstration sites across South Australia trialling various combinations of traditional and innovative approaches to soil management.

New Horizons Program Manager Brett Bartel from PIRSA Rural Solutions says the program aims to understand which soil modification techniques can profitably address constraints and quantify the potential agricultural production gain.

“We believe that by addressing sandy soils and sodiumbound clay sub-soils that are hostile to plant growth, farmers can benefit from better incorporation of water, better holding properties of fertiliser and stronger plants and significantly increase productivity.

“Broad adoption of these new practices would represent a revolution in farm management.

“While the project is in its developmental stages we’re keen to have more farmers officially involved in the New Horizons trials and extension program.”

To find out more about New Horizons or to participate in regional site trials phone Brett Bartel (08) 8226 9771 or visit pir.sa.gov.au/newhorizons

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july 2014

| grain business magazine

21

Supply Chain Management

More than two million tonnes per annum of wheat and barley alone has been exported from Australia in containers in recent years.

Viterra’s container packing and processing plant at Port Adelaide, South Australia.

22

Supply Chain Management

Supply Chain Management/ words/ Mark Fitzgerald, Container Export Trader, Glencore Grain

Container exports open market opportunities Australian growers are benefitting more than ever from strong container exports, which is providing access to more markets around the world and creating more competition for Australian grain.

T

his year has seen Australian container exports make a major contribution to exports across all commodities and in recent months, across several states.

More than two million tonnes per annum of wheat and barley alone has been exported from Australia in containers in recent years.

Wheat is the main commodity exported in containers servicing both the Asian feed and milling industries.

However, malt and feed barley have been exported in greater volumes this season, canola is now reaching more markets in containers and there has been continued consistent demand of niche commodities such as sorghum, corn, lentils and beans.

The container supply chain complements bulk exports by allowing Australia to meet the needs of customers of both large and small scale who prefer containers due to factors such as smaller quantities required; less infrastructure and storage needed at destination ports; ability to purchase specific grades for blending requirements; and less financial risk and exposure.

In 2013/14, the key markets for Australian wheat container exports have been led by China with a large increase in container demand year on year.

Indonesia, Vietnam, Malaysia, Thailand and Taiwan are other consistent buyers usually across eight to 10 months of the year pending domestic stock levels, prices and july 2014

northern hemisphere crops. Their demand continues to increase due to population growth and changing diets of the expanding middle class.

Chinese demand has seen the biggest growth year on year. The combination of an increase in smaller allocations on import permits and limitations around bulk vessels has led to the increase in demand for Australian container imports.

According to the Australian Bureau of Statistics, container exports of wheat to China in previous years have often averaged 10,000 to 20,000 tonnes per month for the early part of the season. This year, China has purchased more than 300,000 tonnes of wheat in containers from November 2013-April 2014, more than double its traditional levels.

Demand in smaller markets has also grown. For example container exports of wheat to Taiwan have doubled year on year, from 15,000 to 20,000 tonnes per month in 2012/13, to 20,000 to 30,000 wheat tonnes per month this year.

China has been the largest importer of Australian barley in containers this season, double the volume of any other destination. This is for various end users, from malthouses to the growing stock feed market. Taiwan, although much less, also has a very consistent requirement of feed barley taking 3,000 to 5,000 tonnes per month for the local feed supply rations, largely pigs.

In further positive news for the Australian grower we have continued | grain business magazine

23

Supply Chain Management

Container exports add an important competitive element to the Australian grain industry. While the quantity of exports is small compared to bulk shipments it allows more international customers to buy Australian grain. to see strong demand for canola containers nationally. Although canola is a very small part of the container market comparatively, we have continued to see solid demand this season and up towards 100,000 tonnes has been exported nationally.

The key driver in this market is Vietnam which accounts for over 50 per cent of this demand. For Vietnam, containers work well for its specific costing purposes and the buyers where it will often be distributed to many different smaller end users. Canola oil is being blended or substituted in cooking and foods as large franchises move away from palm and soybean oil to a healthier alternative.

Sorghum container exports are expected to be down approximately 60 to 80 per cent year on year due to a sharp reduction in Australian production and low carry over stocks from last season. Container exports relative to crop size will remain steady and China is solidifying its standing as Australia’s premium sorghum buyer.

Around 100,000 tonnes of sorghum is likely to be exported in containers

this season from Queensland and New South Wales, with the bulk of this product destined to make the Chinese spirit Baijiu.

Traditionally a vast amount of Australian pulse exports have been via containers. The container pathway facilitates an end user market made up of hundreds of street market (mandi) traders. Containers also allow for “just in time” purchase and delivery versus the bulk pathway. Pulses are by their nature, and scarcity compared to cereals (in Australia), most effectively exported via containers.

Soft handling, bagging and cleaning are all key to the successful marketing of Australian pulses and containers make this a possibility.

Pulse markets differ greatly by type and even by variety. Varietal differentiations are critical for end users, especially in lentils. India is the largest producer of pulses in the world, but also the largest consumer.

Generally the areas of greatest demand also have their own natural supply. This balance is one of the reasons behind the wild fluctuations in demand for pulses.

Traditionally in Australia upwards of 90 per cent of cereal container exports occur from the eastern states. This year, with the recent tough conditions in the northern cropping zones and continued high domestic demand for grain on the east coast, container export volumes from South Australia and Western Australia will be higher. Sea freights into major Asian destination ports are generally higher from these zones, but the high domestic prices on the east coast are allowing for a steady flow of exports. However, depending on the time of year and the availability of food quality containers, exports can be capped from South Australia and Western Australia.

Container exports add an important competitive element to the Australian grain industry. While the quantity of exports is small compared to bulk shipments it allows more international customers to buy Australian grain.

Accessing these smaller markets and supplying niche, high value products increases the overall demand for Australian grain and that is good for growers.

Viterra provides integrated packing solutions Viterra’s grain and cotton container packing and processing facilities are the largest across southern and eastern Australia.

The sites, located at Two Wells and Port Adelaide in South Australia, Dooen and Laverton in Victoria and Narrabri in New South Wales, offer integrated storage and packing solutions to meet the needs of growers and buyers.

Damien Lee, Viterra’s Manager, Packing and Processing says with multiple buyers and packing clients using Viterra Packing and Processing growers receive competitive prices for their grain.

“The global marketing reach of Glencore and other buyers ensures Australian grain is exported to all possible destination markets,” Damien says.

The business is one of the most established in Australia with the keys to its success being flexibility and meeting customers’ differing needs.

“We maintain the internationally recognised ISO 22000 (food quality accreditation) at all sites ensuring integrity of the product delivered to the customer.

24

“We have dedicated classification labs at all sites with our staff well trained for inspection and commodity testing.”

Viterra offers a range of delivery and packing options.

“Harvest deliveries and storage are available at Two Wells, Port Adelaide, Dooen and Narrabri and throughput delivery contracts are available at all sites.

“Each customer and international end-user has different requirements which we are able to meet through the range of services we offer at our different sites.

“We offer different packaging options including bulk and bagged (2550kg bags packed into containers), farmer dressed and machine cleaned and blending to meet customers’ specific requirements.

“The flexibility of having sites across Australia means we can pack and process the full range of commodities and supply from different regions across Australia,” Damien said.

For more information contact Damien Lee, Manager, Packing and Processing. T: (03) 9931 5900. E: damien.lee@viterra.com

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To view online scan the code to go straight to the harvest recruitment page on the Viterra website.

Go to viterra.com.au/careers

Supply Chain Management

Supply Chain Management/ Study finds export grain costs down A report has found that Australia’s export grain supply chain costs are less today than in the 1980s.

T

he Australian Export Grain Innovation Centre (AEGIC) report, The cost of Australia’s bulk grain export supply chain, found wheat supply chain costs ranged between 31 per cent and 33 per cent of the wheat free on board (FOB) price during 1986-87, compared to 18 per cent and 23 per cent during 2013-14.

AEGIC’s study has found two key challenges that Australia faces in reducing the cost of its supply chain processes.

The first is the prevalence of low density grain production areas, which

impacts freight and logistics costs.

“Australian farmers and other freight operators must travel further to collect a given volume of grain compared to international competitors,” says AEGIC Chief Economist and report co-author, Professor Ross Kingwell.

“Grain handlers also tend to be required to offer more receival sites within a geographical area to help lessen farmers’ travel distances and travel times.”

The second issue is the volatility of Australia’s grain production.

The AEGIC report indicated that

the variation in Australian export volumes is three times that of the US and Canada.

“The consequence for Australia is that the storage and freight industry must incorporate the capacity to flex up and down in response to production volumes and so excess capacity is built into the supply chain,” Professor Kingwell says.

“The costs of under-utilisation of freight and storage assets add to the costliness of Australia’s grain supply chains.”

Another factor found to be impacting on supply chain costs, relative to other parts of the world, was Australia’s path dependency resulting from a reliance on expensive, long-lived investments in rail lines, permanent bulk grain storage and port infrastructure.

The report also looks at the impact of recent infrastructure investments including the export terminal at Port Kembla (NSW), which will be known as Quattro Grain, the Bunge export grain terminal at the port of Bunbury (WA) and gives an update on interest in the Albany port (WA).

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Industry Spotlight

Industry Spotlight/ A Good Trade With approximately half a million contracts signed across the Australian grain trade annually, and as little as 10 disputes officially arbitrated each year, it’s fair to say Australia’s grain trading system is working like a well-oiled machine.

T

his success rate can be attributed to Australia’s professional and systematised approach to grain trading, facilitated by Grain Trade Australia (GTA).

GTA is responsible for providing the Australian grain industry with grain standards, trade rules and contracts, supported by a dispute resolution service, to enable efficient trade across the grain supply chain.

“Our role is to ensure there is a common understanding right across the supply chain of the processes required to buy and sell grain,” said GTA CEO Geoff Honey.

“The system doesn’t favour one sector over another; everything has to be fair and equitable.”

GTA has over 260 member organisations ranging from regional family businesses to large national and international trading and storage and handling companies and state and national farming organisations.

Its members are responsible for over 95 per cent of all grain storage and freight movements made each year in Australia.

More than 90 per cent of all grain contracts executed annually within the country refer to GTA’s Grain Trading Standards and/or Trade Rules.

Australian Grain Industry Code of Practice Central to GTA’s focus is ensuring the quality and integrity of grain supplied to end users and customers, and this year it launched Australia’s first Australian Grain Industry Code of Practice to do just that.

The purpose of the Code, which took about five years to develop, is

july 2014

to describe practices that the grain industry uses to ensure Australian grain and grain products meet domestic or export customer requirements.

“Within the Australian grain industry there are already good quality initiatives in place at each step of the supply chain from the breeders and growers through to the handlers and distributors.

“It means that what ends up overseas or in domestic markets, matches customer contract specifications.

“We wanted to put all of those systems into one document, so that if you’re trading Australian grain, you can be confident there is a process in place that prioritises the quality and integrity of the product at every stage.”

Securing Australia’s position as Asia’s preferred supplier of premium grain was a key driver behind the development of the Code.

“Australia enjoys a natural freight advantage into Asian markets, however, it would be pure folly to expect this situation to continue unchallenged,” Mr Honey said.

“Along with our major competitors, Canada and the US, we are now competing with players exporting from the Black Sea. “There is a possibility that Australia’s geographical advantage could be eroded, should freight rates fall, and quality of grain from new competitors improves.

“Therefore it is essential for Australia to prove it will deliver a superior product, every time.

“Delivery of a quality product to an end user, domestic or export, is the best way to ensure that Australian grain is recognised as a premium product able | grain business magazine

27

Industry Spotlight

Infographic supplied by Grain Trade Australia

01

CONTRACT CONFIRMATION (GTA No.3) & VENDOR DECLARATIONS

02

FREIGHT CONTRACT

03

STORAGE AND HANDLING CONTRACT

04

FREIGHT CONTRACT

05

TRACK CONTRACT (GTA No.2).

DELIVERED CONTAINER TERMINAL CONTRACT (GTA No.1).

06

VOYAGE CHARTER PARTY - AUSGRAIN 2013. COST INSURANCE FREIGHT CONTRACT (GTA No.5).

GTA HAS CONTRACTS AND STANDARDS THAT TAKE AUSTRALIAN GRAIN TO DOMESTIC AND EXPORT MARKETS

SUPPORTED ACROSS THE ENTIRE SUPPLY CHAIN BY: PUBLICATION OF GRAIN TRADING STANDARDS. PROFESSIONAL DEVELOPMENT PROGRAMS. SPECIALIST WORKSHOPS - EXPORT CONTAINERS/ADVISORY & COMPLIANCE. AUSTRALIAN GRAIN INDUSTRY CODE OF PRACTICE. DISPUTE SERVICES (ARBITRATION). NATIONAL WORKINGPARTY ON GRAIN PROTECTION (GTA CONVENOR). AUSTRALIAN GRAIN INDUSTRY CONFERENCE (IN CONJUNCTION WITH AUSTRALIAN OILSEEDS FEDERATION & PULSE AUSTRALIA).

to compete on world markets.

“And we now have a document that captures how that can happen. We are the only major grain exporter to have an industry code of practice that runs across the entire supply chain.”

Mr Honey said that for growers, the Code explained why it was important to clearly identify varieties at delivery and declare chemicals applied during storage.

“The Code doesn’t go into what growers will or will not farm or how they farm. But it does talk about varieties and chemicals.

“They are the two issues growers need to be mindful of from a quality perspective that will flow through to end users,” he said.

“If a grower wants to look at other aspects of the Code, it will give them comfort as to what occurs downstream from their production. It will give them a deeper understanding of how their grain is handled through the system.”

Mr Honey said that all GTA members would be required to adhere to the Code, which is published on GTA’s website, but that industry would be required to self regulate to ensure it was properly adopted.

“We won’t be actively policing the

28

Code, but we do have a complaints process where if someone has an issue with a GTA member you can report it.”

Diploma in Grain Management Another area of focus for GTA this year has been in education. GTA already delivers a well recognised professional development service to the industry but this year it will launch Australia’s first Diploma in Grain Management, offering at least seven different courses.

“The Australian grain industry produces $8 to $10 billion worth of product a year, and yet there are no grain specific tertiary qualifications available,” Mr Honey said.

“Our Diploma in Grain Management will offer people interested in entering the industry a career pathway, as well as providing those within the industry a formal qualification.”

Mr Honey said there were courses tailored specifically for growers to help them understand grain markets, covering off what a grower’s responsibilities are in relation to the Grain Trading Standards and trade contracts.

“If there are grower groups out there that would like us to run the courses

for them, we encourage them to get in touch with us,” he said.

The Diploma will be initially offered through Rural Skills Australia, and GTA is working towards it being available through Agricultural Colleges and Universities in future.

A list of courses can be viewed on the GTA website.

Contracts for growers free of charge Mr Honey said if there was one area that GTA could add value to a growers’ business, it was in the provision of free contracts for a wide range of commercial transactions.

“Some growers may be unaware of the amount of contracts available to them, free of charge, that could help protect their rights in various aspects of their business,” Mr Honey said.

“We encourage growers to have a look at the variety of contracts available to them, as they are designed to make their lives easier, allowing them to focus on price and delivery, rather than the details of their commercial transactions.

“All of our contracts are on our website and can be downloaded for free,” he said.

quality Management

quality Management/

KEEPING AN EYE ON OFF-LABEL CHEMICAL USE

Grain growers have been warned to be extra vigilant about off-label in-crop chemical use during the 2014 season, following the detection of Group B imidazolinone herbicides in a market surveillance sample destined for Japan earlier this year.

The incident highlighted the issue of Maximum Residue Limits (MRLs) and the potential for a future threat to Australia’s export trade.

The following guide provides an update for growers.

What is a Maximum Residue Limit (MRL)?

The Maximum Residue Limit (MRL) is the highest residue concentration of a particular chemical that is legally permitted or accepted in a food or animal feed. If the chemical is used in accordance with the product label, the residue levels in the commodity should be below the MRL. This is defined as good agricultural practice (GAP).

What is the easiest way for growers to adhere to MRLs? Strictly follow the directions on the chemical product label to ensure that any residues detected in grain will be below the Australian MRLs. Growers can check relevant websites for information about Australian MRLs: apvma.gov.au; foodstandards.gov.au.

For exported grain, many overseas governments set MRLs based on their own chemical registration process. These MRLs may differ from those set in Australia. Other countries choose to adopt Codex (the international food standards organisation) MRLs as trading standards. To know the MRLs for intended export destinations, growers should check relevant websites: daff.gov.au/nrs; graintrade.org.au to ensure exported grain meets the trading requirements set by a particular country.

What are the consequences if MRLs are not adhered to?

If contamination is detected at the export destination, the grain can be embargoed at the (overseas) port, incurring costs in the form of demurrage and damages. These costs can be millions of dollars. The exporter may be required to organise the retrieval of that container and return it to the country of origin. The exporter may then endeavour to recover costs from the handler or from the individual grower.

A single MRL violation can lead to punitive measures on all Australian grain exported to that country and damage Australia’s reputation internationally.

july 2014

| grain business magazine

29

quality Management

How can a grower vouch they have adhered to MRLs? Growers are required to sign a vendor declaration when they deliver grain, which acts as a clear indicator that the grower understands both good agricultural practice requirements and more specific market requirements requested by the grain trader.

heavy metals and organochlorine insecticides) and fumigants such as phosphine.

Industry uses the results of the NRS to underpin market access by demonstrating ongoing compliance with relevant standards.

What role do traders play in adhering to MRLs? Grain traders should understand the market requirements for the grain destination prior to signing export contracts and ensure that the required vendor declarations on chemical use are obtained from growers at the time of grain delivery.

What is the current situation with MRLs in the Australian grain industry?

Australia continues to have an excellent ‘clean and green’ reputation in regard to compliance with MRLs and good agricultural practice. For the average 5000 NRS grain samples collected per annum, the compliance rate with Australian MRLs continues to exceed 99.8 per cent.

How are chemical residues regulated on farm?

The State governments through their agencies are responsible for regulating the use of registered chemicals on farm through field inspections and traceback investigations.

The verification of good agricultural practice, supporting control of chemical use, is facilitated by the National Residue Survey.

Residue checklist for growers

What is the National Residue Survey?

The National Residue Survey (NRS), facilitated by the Australian government, is a means to monitor residues in grain commodities to ensure products are below set limits.

The survey involves collecting grain samples from bulk export terminals, export container packers, maltsters, stock feed manufacturers, feedlots, flour millers, oilseed crushers, oat processors and chickpea canners.

Samples are screened for insecticides (including postharvest grain protectants), fungicides, herbicides, insect growth regulators, environmental contaminants (including

30

1 Use chemicals in accordance with directions on product labels.

2 Understand the types of chemicals registered for use, particularly when applying late in the season for crop desiccation.

3 Ensure you complete vendor declarations, which guarantees the quality of your product to bulk handlers and export customers.

4 Know the MRLs for the Australian domestic market (apvma.gov.au) and export markets (daff.gov.au/nrs) as these differ from country to country.

Information provided by: Andrew Weidemann - Chairman Grain Producers of Australia, Ian Reichstein -National Residue Survey Department of Agriculture, Bill Murray - Chairman of the National Working Party on Grain Protection, Gerard McMullen – Grain Trade Australia Project Manager Grain Quality, Ken Young - Acting Senior Manager GRDC Plant Health, Jason Lutze – Pesticide Residues Manager APVMA

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farm profile / blue hills

Blue Hills FARM PROFILE

32

Property Location

Blue Hills is 15 km north of Narrabri, in northern New South Wales (near Edgeroi). The property name Blue Hills reflects the property’s view of the stunning Nandewar Ranges.

farm profile / blue hills

Owners/managers

Ian Gourley and his wife Georgina and their children Isabel (13) Laura (12) and Angus (10); also involved are Ian’s parents Robin and Nerida (semi retired). Ian is a member of the national policy group for Grain Growers Australia (GGA), the Northern GGA local research committee and Agricultural Marketing and Production Systems (AMPS) Agribusiness Research committee. He is also heavily involved in local rugby as both a coach and referee.

Soil types

Blue Hills features predominantly black self-mulching loamy clays.

Rainfall

Blue Hills has a long-term average rainfall of 675 mm. However, the last two years have been extremely dry (around 400 mm annual rainfall). Last season, the only rainfall event was in March (a 200 mm event). No further effective rain fell until March this year.

Total farm area and cropping program 95 per cent of the Gourley family’s 3500 ha property is arable and continuously cropped using a five-year rotation. They grow durum wheat, bread wheat, pulses and dry-land cotton. Canola is part of the cropping program in 2014, given the 2013 summer crop was not planted due to the drought conditions.

Employees

The Gourleys employ one permanent farmhand and two casual farmhands at harvest.

Machinery

• Tractors: Case 485 and 335 on a three metre controlled traffic system.

• Automated Steering: Trimble auto guidance system.

• Seed Rig: 12m Boss single disc.

• Spray Rig: Hayes tow-behind 36m spray rig.

• Summer spray rig: Hayes camera spot sprayer with crop optics cameras.

• Harvester: 12m (42 ft) front New Holland (use contractor to assist in big seasons).

• Cotton harvester: John Deere cotton pickers (for good seasons) and cotton stripper when yields are low. The cotton picking gear is the only machinery not on the controlled traffic system.

• Chaser Bin: Bin with conveyor set-up to stay on tram tracks when unloading on go.

• Trucks (use contractors).

july 2014

| grain business magazine

33

farm profile / blue hills

Right: Ian and Georgina Gourley

When was the farming district settled?

Europeans explored the Narrabri district between 1818 and 1831, and the first squatting run, The ‘Nurrabry’, was taken up in 1834. In the early 1860s the area was slowly opened up to smaller selectors and wheat growing began in 1873. A major soldier resettlement scheme was implemented at Edgeroi (24 km north) after World War II. Q What is the history of your farm? When settled and by who?

A My parents Robin and Nerida purchased the farm in 1966. I was the youngest of four children (I have two brothers, Andrew and Scott and a sister, Jenny). I always enjoyed being on the farm. After I did my degree I was working in agribusiness and I came home when I could to help with harvest. When (in 2000) my father said he was thinking about retiring and was wondering whether to lease or sell the property or if any of us were keen to come home and run the property, I took that opportunity. Since then we have expanded the original farm from 1200 ha to currently 3500 ha.

Q Why grain farming - why not stock?

A The very friable nature of our self-mulching loamy clay soils lends itself to very high water Q A

34

holding capacities and consequently, our farm is more productive and profitable in a continuous cropping situation.

Q What education and training did you undertake?

A I completed an economics and finance degree at the Macquarie University in Sydney and then worked in Sydney for another six years with agribusiness companies including AWB and DR Johnson (Conagra). I am always making use of the skills I learnt at uni and at work here on the farm. In regard to agricultural training, most of that I picked up from my father and from my good friend and private consultant Drew Penberthy (Penagcon). I’d jump in the vehicle with him while he was driving around farms and just keep asking questions and learning.

Q How do you manage your cropping program?

A We run a five-year rotation on each block.

Generally we have a winter cereal (durum wheat where possible or bread wheat) then a pulse crop (generally chickpeas or faba beans) then bread wheat, then a long fallow into cotton, and a long fallow coming out of cotton. We try to stick to that rotation – we don’t change things up to chase good wheat prices for example. Sometimes if we have

good moisture coming out of cotton we will double crop into pulses. Some of our newer country is not as well suited to durum, so we will have extra bread wheat in the rotation.

Cotton and durum wheat are the commodities we tend to focus on most as they produce the most profit. We are in an area that can regularly produce prime hard bread wheats (13 per cent protein or higher) and Durum 1 (13 per cent protein or higher).

We like to keep up with any new varieties that are coming out of local field trails that might be suitable for our farming system (made easier by the fact Narrabri is home to the University of Sydney’s main wheat research field testing site).

At the moment we are using two new high yielding bread wheats, Lancer and Suntop. Lancer is a shorter stature plant with possibly less bio-mass. This variety allows us to manage our nitrogen early into the fallow whilst not growing so much bio-mass, and again if we run out of moisture later in the season around flowering and grain fill. When this situation occurs in our district the crops tend to get smashed with crown rot if we are not careful.

In terms of durum varieties we use

farm profile / blue hills

Caparoi and Jandaroi depending on the break (Caparoi is slightly earlier flowering than Jandario but has similar yields and good semolina colour).

We try to grow 50 per cent Bollgard (Roundup Ready) and 50 per cent conventional cotton varieties (at present using the high yielding variety Sicot 74BRF).

The reason we continue to grow conventional varieties is purely risk mitigation. You don’t have the insect losses with Bollgard so it tends to cut out earlier. With conventional varieties which are still under insect pressure they can drop their early fruit but make use of later rains after it’s too late for the Bollgard.

We would really like to see more focus on breeding of conventional cotton varieties. It seems the focus has shifted and there are very few new conventional varieties coming through the system adapted to our significant dryland farming systems.

We retain all stubbles. Stubbles tend to break down quickly, and coming out of cotton the paddocks are bare, so often we’ll sow a cover crop of chickpeas.

We use private agronomists: our cotton agronomist is Anna Madden and our winter crop agronomist is Penagcon. july 2014

Tell us about your tillage practices We are in a zero-tillage controlled traffic system for all our crops except cotton.

Bollgard varieties require a full cultivation after picking to 10 cm depth for control of the heliothis pupae. So every five years each block gets a full cultivation.

We are in our second season of using a single disc planter for winter crops and double disc planter for summer crops (prior to that we had a Janke tyne planter with following press wheels). The disc planters are certainly more efficient, we’d be going over 25 per cent more country per hour, and it’s doing a really nice job. The only drawback is the higher maintenance required on the machine.

We have been using controlled traffic farming, guidance and variable rate technology for more than 10 years. We have evolved our system over time - we have tried to keep up with whatever technology has been available. We use Precision Cropping Technologies in Narrabri (Andrew Smart) to help us keep on top of things. I really enjoy this side of farming because we are at the cutting edge of new technologies and with help from Drew use these techniques to fine tune our inputs and to improve efficiencies Q A

and reduce production risks.

What is your fertiliser regime?

A Coming out of long fallow cotton we apply on average 100kg/ha of nitrogen and coming out of pulses apply 60-80kg/ha nitrogen depending on our starting soil moisture profile. I have a strict soil testing regime each year, sampling from the same GPS location in increments down to 90 cm. We often dig soil pits and assess what the crops have done at depth as well.

Once we (Drew and I) analyse the soil tests in combination with our environmental monitoring and yield maps we produce a variable rate fertiliser application for that paddock for that season. The overall rate might be 100kg/ha nitrogen, but it can vary between 40 kg/ha N on poorer parts of the paddock up to 140 kg/ha N on the more fertile parts. We aim to minimise our costs on our poorer soils – we view putting 100 units of N on poor country is simply a waste of money, and that nitrogen is put to much better use on our better soils.

We have also variable rate applied chicken litter and gypsum in the past to improve some poorer performing areas if applicable.

Q

| grain business magazine

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farm profile / blue hills

Right: Adrian O’Rourke, farm hand, Blue Hills Far right: Ian Gourley

As a result of our rotation, our cotton doesn’t need any nitrogen, as there’s normally an ample supply of nitrogen in the lower soil profile for the crop. We use Cotton Sustain to supply the crop’s phosphorus requirements at 40kg/ha, which helps maintain our soil reserves.

We are not deficient in phosphorus on our soils as we have reasonable BSES P readings, but Drew and I have taken the approach that we need to maintain these levels so as not to mine the soil to a level where we have to apply these products every single year to maintain yields (we can miss a season here and there if we wish). This is a longer term approach to crop nutrition but hopefully it will keep our farm more sustainable in the longer term for when the kids kick me off.

The Cotton Sustain also allows us to keep up the potassium levels in our soils as our soils are naturally high in sodium and if we don’t maintain the Sodium to Potassium ratio then our crops (especially durum) can take up more sodium instead of the potassium and effect yields.

Q What is your normal herbicide regime?

A The biggest weed problems at Blue Hills are Windmill grass and fleabane. We use duiron as a broadacre residual to control early Fleabain germination. We usually apply Roundup twice over summer (this is working fine at moment but we are very conscious of over-use). We also utilise Verdict and Select in the cotton crop to make sure we stay on top of our windmill and barnyard grass problem areas.

We spend a lot of time scouting for problem weeds to enable us to attack these areas to prevent seed set whenever possible.

36

How do you manage herbicide resistance?

We use camera spray technology which means we can afford to use newer, more expensive modes of action to manage resistance (typically with summer weed spraying we use only five-10 per cent of chemical by utilising the camera spray to isolate and spray weeds).

We use Roundup Ready cotton, but wouldn’t use Roundup Ready canola.

Q What is your normal fungicide and pesticide regime?

A With Bollgard in widespread use we don’t see late heliothis, which is a huge saving in the back end of conventional cotton cropping. We used to spray 18 times, now we’d be back to six or seven sprays.

Q How do you manage pesticide or fungicide resistance?

A There was a lot of pesticide resistance to heliothis early on, but this seems to have disappeared and the old technologies are getting better control of pests. Fungicide wise, we are prone to aschochyta and botrytis in chickpeas and rust in faba beans and wheat.

We are vigilant in getting early control but we haven’t had the wet years to see any real disease pressure over the past few seasons.

We use newer varieties that have better built in resistance as part of our chemical resistance management strategy.

Q What is your overall strategy with chemical use?

A Our crop rotation has been designed to ensure we can change modes of action for all chemical use.

Q Do you belong to a farm management group?

A We have been doing benchmarking for the last eight or nine years with Agripath consulting, an independent benchmarking Q A

group based in Tamworth. This has been hugely beneficial: we know where we stand in a like-minded group. We are a very open group, we don’t hide anything. We look at financial ratios, machinery and labour ratios and can challenge everything we do.

Q Do you use a farm management adviser?

A In terms of the farming business, the basic knowledge from what I learnt a university and in business comes into play. It helps in running all aspects of the farm – planning, marketing, buying, selling etc.

Q What is your harvesting routine?

A We harvest most of our own crop, employing contract harvesters in big seasons. We’re close to a good local silo and most of our durum and bread wheat goes there unless it’s off-grade. We have a small amount of onfarm storage to assist with blending. We also use silo bags as short term storage (just for harvest management).

Q How do you sell/market your crop?

A We use a combination of forward physical sales of wheat plus futures, and area contracts where possible for pulses.

Q Who do you rely on for grain marketing advice?

A We work in together with several other farmers in the district to do our grain marketing. We meet quite often and invite different market people to come in and give a talk on a topic and each of us is responsible for researching a commodity before each meeting and presenting that information to the group.

As a group we work out what information we should use and what we should ignore and we make recommendations as a group.

farm profile / blue hills

As individuals, we don’t have to act on the advice of the meeting, but it’s a great way of getting a balanced view of the market and reducing the overload of information and the difficulty of speaking with traders just talking the book. This also has advantages in terms of dealing with bigger volumes - buyers are definitely interested in dealing with bigger parcels.

The group has evolved over time. We just started by talking to each other ad hoc, and we found we were making good decisions in our own heads and when we got together, but we weren’t acting on them. So we decided to formalise things a bit and have regular meetings. We’ve built up a marketing matrix with a few rules about what percentage of the crop can be forward sold at what time, and trigger points for the futures market.

Q What are the three biggest challenges/risks to your farm business?

A Our biggest risk is the increasing cost base.

Our input costs just keep going up and it’s difficult to maximise the prices we get, often when we want to make use of high prices, the risk is too high.

Q How do you try to manage those challenges/risks?

A We keep an eye on the costs we can control, such as machinery and wages. We have got into new technology early and done contracting work to pay it off. If you are late getting into the new technology, there’s no scope for getting a contracting income out of it. Out here it’s important to have reliable equipment that doesn’t break down, as the cost of mechanic services is very high (around $500 minimum to get a mechanic on farm).

Q What technological developments do you july 2014

foresee which will improve your family farm?

We believe crop breeding will continue to improve and look forward to traits in crops such as the Omega 3 wheat. We can’t keep relying on growing a bulk commodity – we need to get a niche product growing so people are happy to pay more for the product we grow.

Q Do you have future expansion plans?

A We have no issue with going bigger if more country comes available. Land is pretty tightly held in this area and the farms are mainly family holdings which aren’t big enough for corporate farmers. Land values in this area are $2000/ha to $2500/ha.

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

A We have an attachment to the family farm, but we wouldn’t stay here if it was going to mean we would go broke.

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

A Yes, we do food production well. We are efficient, we are very environmentally conscious. We are clean and green. That’s what the customers want – they just need to pay more for it.

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

A Our children will have the opportunity to return to the farm, but we have an understanding that they must go to university or get an experience away from the area first.

Q What is your retirement/succession plan?

A I’m not planning to be farming when I am 70, but we’ve nothing formal organised at this stage.

A

We believe crop breeding will continue to improve and look forward to traits in crops such as the Omega 3 wheat.

We can’t keep relying on growing a bulk commodity – we need to get a niche product growing so people are happy to pay more for the product we grow.

| grain business magazine

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Farm Safety

farm safety/ words/ Marcus La Forgia

Safety focus paying off An agricultural health and safety expert believes the farm safety message is finally beginning to gain widespread traction in the industry, with the latest data showing the number of deaths and injuries continues to fall.

The latest data is consistent with the long-term trend, with reductions in the number of farm injury deaths approaching 65 per cent over the past two decades.

F

igures from the Australian Centre for Agricultural Health and Safety highlights that the number of farm deaths and injuries is trending slightly below average for the beginning of 2014, with 17 deaths and 30 injuries recorded to the end of May. The latest data is consistent with the longterm trend, with reductions in the number of farm injury deaths approaching 65 per cent over the past two decades.

Director at the Australian Centre for Agricultural Health and Safety, Associate Professor Tony Lower, said although the downward trend in farm deaths and injuries was a move in the right direction, producers needed to remain vigilant when it came to safety. july 2014

“Twenty years ago we were looking at 150 deaths a year on average and now we’re down to about 50 per year.

We’ve looked at the number of workers and number of farms and it’s a real reduction, not just because there’s fewer people working in agriculture,” he said.

“While it’s moving in the right direction, every farm death or injury is regrettable and I’d love to see that number continue to fall.

“Of particular concern is the number of child fatalities and injuries reported in the latest data and this has been an ongoing feature since we’ve been collating these reports,” he said.

“We never like to see injuries or deaths in the workplace, but it’s even more devastating when children are involved.

“Farms are one of the few workplaces where children are entering a work environment on a regular basis and where there is serious potential for injury or death. This should provide every farm with extra incentive to move towards a safer workplace.

“It’s not just enough to be cautious. Kids are curious and like to explore. It’s best if you can keep kids away from work areas, but if not, they need to be supervised and trained on what to do, taking into consideration their age and capacity to learn,” he said.

Associate Professor Lower said it was promising to see a much greater awareness of Work Health and Safety (WH&S) among farmers.

“There’s been some really fantastic steps that have

been taken in controlling the risks – and there’s a lot of risks in agriculture.

“It’s probably a combination of the number of fatalities, fear or litigation and wanting to do the right thing that is driving change, but I’d like to think it’s moving further away from concerns about litigation and more towards being a good employer and doing the right thing by staff, which is often your family,” he said.

Planning a safer workplace Associate Professor Lower said the first step in implementing a safe work environment was to put in place a plan outlining how you are going to create change.

“It’s not just about having a plan and letting it sit there and collect dust,” he said. | grain business magazine

39

Farm Safety

Farms are dangerous workplaces. Injuries and accidents are going to happen and you can’t ignore it. Ignorance isn’t a defence. There are farmers on a journey who have accepted that and then there’s a lot who have still yet to come to that realisation.

“It’s about having something that will help you adapt to the constantly changing conditions and situations on the farm.

“It could be a climatic event, a new piece of equipment or new workers, but in every scenario there’s going to be safety implications and your plan needs to be able to guide you through that.”

Associate Professor Lower said the key steps for implementing better safety on the farm included: • Having a safety plan in place that identifies potential hazards and taking specific actions to fix these.

• Always being on the lookout for new hazards and fixing these as soon as possible once identified.

• Setting clear safety procedures for risky work.

• Making sure everyone that works on the farm understands and uses the safety procedures you have for your farm.

• Having an emergency plan in place in case there are any incidents.

“I still think there’s a fear from some producers that implementing farm safety is a very complicated issue

40

and they want to defer it,” Associate Professor Lower said.

“While there is a lot of detail to consider, it’s a relatively straightforward process and it’s really in a producer’s own interest to do something.”

No room for ‘cowboys’ According to figures from the Australian Centre for Agricultural Health and Safety, workers compensation claims costs the grains industry approximately $10 million each year, which Associate Professor Lower said is reason enough to start doing the right thing.

“Considering that workers compensation premiums are worked out on the performance of the entire industry, it’s important that the whole industry makes gains and not just individual producers,” he said.

“While the majority of the industry is moving in the right direction, there are still some producers who aren’t adopting safety practices in the way they need to.”

Chris Heinjus, Director of agricultural consultancy Rural Directions Pty Ltd, which works with farm

businesses at an Advisory Board level on implementing safety measures, supported this view and said they were still seeing a mixed bag when it came to farm safety.

“There’s always been a bit of a culture in the agricultural community of ‘it won’t happen to me’ and we’re still seeing that when it comes to safety,” he said.

“There are farmers out there who want to do the right thing and are trying, but there’s still those who show disregard for the legislation.

“Farms are dangerous workplaces. Injuries and accidents are going to happen and you can’t ignore it. Ignorance isn’t a defence.

There are farmers on a journey who have accepted that and then there’s a lot who have still yet to come to that realisation.

“Work Health and Safety is more than a fluoro shirt and boots. There’s a lot to consider – where are your standard operating procedures, your inductions and how do you treat contactors? We are finding that there’s some significant gaps between the risks and meeting the requirements of legislation.”

Farm Safety

2014 DEATHS ON FARMS YEAR TO DATE (as at May 29 2014) Category

Agent

Deaths

Farm Vehicle

Aircraft

1

Helicopter

1

Quad

5*

Utility

1

Mobile Farm Machinery/ Plant

Tractor

4

Earth Moving Equipment

1

Farm Structure

Roof

1

Door

1

Electricity

Powerlines

1

Working Environment

Trees being felled

1

TOTAL

17

*Two aged under 15 years 2014 INJURIES ON FARMS (as at May 29 2014) Category

Agent

Injuries*

Farm Vehicle

Quad

13

Motorcycle

2

Helicopter

1

Ute

2

Truck

1

Farm Vehicle NEC^

1

Pesticides

1

Fuel

2

Mobile Farm Machinery/ Plant NEC

3

Animal

Cattle

1

Other

Firearm

1

Snake

1

Lightning

1

Farm Chemicals

TOTAL

Think twice about quads

Quads continue to be the leading cause of death and injury on farms with five fatalities and 13 injuries recorded to date in 2014, according to figures from the Australian Centre for Agricultural Health and Safety.

Centre Director, Associate Professor Tony Lower said it was time for producers to think twice about the use of quads in their farming operation.

“Quads have been the leading cause of death on farms in Australia for four of the last five years,” he said.

“They’re essentially a recreational vehicle that’s not designed for agriculture. They have no lateral stability standards and with a vehicle that’s around 300kg, when they go over they crush people.

“Fortunately, we’re beginning to see a move away from quads which is a step in the right direction.”

Tractors were the other big cause of deaths to date in 2014, resulting in a total of four deaths.

30

*Four aged under 15 years ^Not elsewhere classified

july 2014

| grain business magazine

41

CROP NUTRITION

CROP NUTRITION/ WORDS/ Peter Fuller

BETTER PHOSPHORUS MANAGEMENT WILL CUT FERTILISER BILLS Fertiliser is the largest single variable expense for grain growers (13 per cent in 2011) but surprisingly phosphorus, rather than nitrogen, can often be the major contributor to the crop nutrition budget.

“

Prices for phosphorus compared to other fertilisers are relatively high, and there will always be a need for it due to inherently low phosphorus levels in Australian soil,” said Dr Sean Mason of the University of Adelaide.

“Fertiliser efficiency in the short term can be low due to phosphorus tie up in the soil. Even at replacement phosphorus rates, the cost of input is still one of the largest.

“Because the levels of available phosphorus can be hard to measure, growers tend to either over apply, which potentially adds to unnecessary costs, or under apply, which could impact on yield.

“A more accurate way of measuring phosphorus will mean dollars in the bank for farmers.”

Dr Mason has been working with DGT (Diffusive Gradients in Thin-films) technology, developed in the UK at Lancaster University in the early 1990s, to test phosphorus deficiency in soils.

The result has been the development of the DGT-P test, which is an alternative to the existing Colwell P test, providing a more reliable and accurate measure of phosphorus in certain soil types, such as calcareous soils and those which are acidic with high iron or aluminium.

The DGT-P test, which was developed with funding from GRDC and released to three laboratories on a commercial basis in the 2013 season, is already 42

receiving positive reviews.

“In 2013 approximately 6000 DGT-P tests were performed commercially with South Australia and Victoria dominating the market,” Dr Mason said.

“This may be due to the proximity of the soil testing labs or the soils most suitable for the test being located in those states.

“There was less uptake from the western and northern regions, where perhaps agronomists and growers are more content with the traditional Colwell P test for their soil types,” Dr Mason said.

Colwell P has been the most common method used for assessing phosphorus availability prior to DGT-P testing.

“Colwell P was introduced in the 1960s and there are enormous amounts of historic data associated with the test which in itself is valuable.

“But we believe there is value in the DGT-P test across all soil types, the main benefit being that it accurately defines phosphorus deficiencies when in some cases Colwell P will overestimate available phosphorus.

“We’ve seen this in other soil types, not just in calcareous soils.

“The DGT-P test ensures that the grower is not experiencing reduced returns from lower than achievable yields due to inadequate application of phosphorus.”

The DGT-P test is a plastic device that uses an iron oxide gel, which

attracts available phosphorus through a membrane. It is placed on moist soil for 24 hours and then washed. The amount of phosphorus bound to the gel is removed by immersion in an acidic solution and then measured.

The DGT measurement incorporates the initial soil solution phosphorus concentration, as well as the ability of the soil to resupply the soil solution pool in response to the removal of phosphorus.

“It is designed to mimic the action of phosphorus uptake by plant roots so in principle is a better method of predicting plant phosphorus requirements than methods based on chemical extractions,” Dr Mason said.

But the DGT-P test is not the only initiative by Australian agricultural scientists hoping to boost the farm bottom line through more efficient phosphorus use.

The GRDC’s long term program More Profit from Crop Nutrition is funding two projects: one on genetics and the other on the link between nitrogen and phosphorus.

Dr Glenn McDonald, also from the University of Adelaide, is studying why modern crop varieties have relatively poor fertiliser use - often less than 40 per cent.

Dr McDonald trialled a number of Australian and international wheat and barley varieties in three different South Australian rainfall and soil

CROP NUTRITION

DGT-P test: A plastic device, that uses iron oxide gel, is placed on moist soil for 24 hours.

Phosphorus bound to the gel is removed by immersion in an acidic solution and then measured.

type sites with either zero or 30 kg/ha of phosphorus.

Plants that either responded to high levels of phosphorus or those that were unaffected by the low level of phosphorus were selected for further research, with a particular focus on their root hair formations.

By mapping the genetics of these root traits plant breeders may be able to develop crop varieties with improved nutrient use.

Another study by Dr Roger Armstrong from the Victorian Department of Environment and Primary Industries has found that nitrogen management is critical to getting the most benefit from phosphorus.

He said while grain crops will show a yield response to nitrogen by itself, there was no response to phosphorus unless nitrogen was applied.

He advised growers to re-assess their application of nitrogen following the last two good seasons and consider its effect on phosphorus as well as directly on plant yield. july 2014

CSIRO researcher Dr Therese McBeath has also found that “starter” applications of phosphorus, particularly during dry starts to the season, were necessary to enable crops to access applied phosphorus.

Dr McBeath found that crops generally use only between three and 30 per cent of applied phosphorus in the year it is applied.

Crops tend to use the applied phosphorus to access other soil phosphorus pools and that much of the applied phosphorus becomes available to crops over time through soil based reactions and is not immediately available to crops, at least in the short to medium term.

Starter phosphorus, particularly during dry starts to the season, was critical for the crop to establish a root system that could effectively explore the soil for plant-available phosphorus pools.

She said it was important that starter phosphorus was applied so the crop can easily access it – preferably by banding it with the seed. | grain business magazine

43

disease Management

DISEASE MANAGEMENT/ WORDS/ Olivia Fuller

Fungal focus for decision tools Australian growers will have the opportunity to save money on fungicide spray applications and increase yield following the development of new disease management tools.

44

T

he tools will be based on the highly successful Blackspot Manager, developed to sustain southern Australia’s $150 million field pea industry, and will tackle a raft of fungal diseases including the costly stripe rust and yellow spot in wheat.

Other diseases on the hit list include wheat streak mosaic virus, beet western yellows virus of pulses and oilseeds, blackspot in field peas, ascochyta blight in lentils, powdery mildew of mungbeans, blackleg and sclerotinia of canola and Fusarium head blight in sorghum and wheat.

The Department of Agriculture and Food Western Australia (DAFWA), which was responsible for the blackspot tool for field peas and blackleg tool for canola, is leading the national GRDC project.

Project leader Dr Moin Salam said the ultimate aim of the tools was to highlight the profitability of fungicide

decisions and reduce the rate at which fungicide resistance develops by avoiding unnecessary and unprofitable applications.

“The tools will provide seasonal information about the likelihood and level of disease infection along with the seasonal conditions that promote the spread of the diseases in-crop,” he said.

“Management recommendations for each disease will be tempered by fungicide costs and the anticipated crop value, to help growers make more profitable decisions around fungicide use.

“We want to provide growers with the information they need to make more targeted decisions around optimal sowing times and the timing and amount of fungicide required.

“For example previous DAFWA research has shown yellow spot and Septoria nodorum blotch (SNB) collectively cause about 11 per cent yield loss across

disease Management

WA. But the profitability of spraying to recover some of this yield loss varies with rainfall and yield potential.

“With the current cost of fungicides being relatively low, an application of fungicide to control yellow spot and SNB is often profitable, but many individual trials show no economic return on chemical inputs for these diseases “What we want to do with these tools is to reduce the ‘grey area’ surrounding fungicide applications, yield response and economic return so that growers can make more informed and profitable choices.”

The biology of each of the diseases will be captured in the tools so that the intricacies of each pathogen’s spore production and spread can be modelled accurately according to past and present seasonal conditions and cultural practices.

“We know from the blackleg and blackspot models that identifying the timing and nature of spore production can vastly reduce the impact of these diseases on early seedling development.

“We will use the blackspot and blackleg models as the basis for the new tools but tailor each with specific epidemic, climatic and agronomic information about yellow spot and stripe rust,” Dr Salam said.

The Blackspot Manager

july 2014

broke new ground in disease management when it was launched in 2011.

Dr Salam said the majority of field pea growers across southern Australia now relied on the Blackspot Manager, delivered online and via an SMS service, to guide sowing decisions.

“Estimates indicate that the model has lifted the profitability of the field pea industry Australia wide by $6 to $18 million,” he said.

“We would like to replicate these results across a range of diseases that impact a growers’ profitability.”

Dr Salam said the research conducted for blackspot had improved knowledge of the mechanism of spore maturity and release, particularly in relation to climate, leading to improved management strategies for the disease.

“Importantly, this work also has implications for future breeding directions in light of climate change,” Dr Salam said.

“The Blackspot Manager predicts less disease pressure under future climate scenarios that suggests there will be more summer rain, but yields may be reduced because of reduced spring rainfall.

“Breeders should therefore concentrate on field pea varieties with shorter growing times rather than developing disease resistant varieties.”

Disease management tools • Field Pea Blackspot Management Guide is a location and season specific weekly forecast, available for WA, SA, VIC and NSW at: agric.wa.gov.au/crops/grains/pulses/field-peas • Blackleg management fact sheet for the western and southern regions is available at: grdc.com.au/GRDC-FS-BlacklegManagementGuide • Canola blackleg spore maturity forecast for Western Australia is available at: agric.wa.gov.au/crops/grains/canola

What we want to do with these tools is to reduce the ‘grey area’ surrounding fungicide applications, yield response and economic return so that growers can make more informed and profitable choices.

| grain business magazine

45

COTTON INDUSTRY

cotton industry/ WORDS/ Olivia Fuller

Growers driving cotton research In 2012 dryland cotton production jumped from approximately 40,000 ha to 200,000 ha nationally, providing a boost that resulted in the industry’s biggest crop on record of 5.2 million bales.

W

hile irrigated cotton still underpins the industry, with approximately 400,000 ha farmed from central QLD down the east coast into the Riverina of southern NSW, dryland development has been flagged as one opportunity to increase production and offer an alternative summer crop to growers.

Traditionally thought of as a risky and hard to grow crop, growers are starting to see the benefits of dryland cotton as part of a farming program, but more research is being sought from growers eager to build on and improve the industry.

Narrabri cotton grower Ian Gourley is part of a group of growers and agronomists joining forces to help prioritise research efforts to maximise the potential of dryland cotton.

“We are trying to develop a mechanism whereby dryland cotton growers can have input into where research dollars are spent,” Ian says.

“In the past, most of Australia’s cotton crop was under irrigation, so that has been the focus for Cotton Australia and the Cotton Research and Development Corporation (CRDC),” he says.

“Although there is some dryland grower participation in CRDC panels, we are endeavouring to build a larger group of dryand growers to advise and work with CRDC. “We are really hoping that through this consultative group, we get more dryland specific projects funded through their yearly funding cycle.

“Dryland growers by their very nature are innovative and industrious

Cotton Snapshot • Australia’s cotton is sold into a world market, competing against around 75 other cotton producing nations for its share of global cotton trade.

• For the last two seasons, the Australian cotton industry has generated in excess of $2.5 billion in export revenue, making it one of Australia’s largest rural export earners and helping to underpin the viability of many rural communities.

• Australian cotton growers are considered the most innovative in the world and are renowned for producing a consistent, high quality product.

46

• Australia is one of the largest cotton exporters in the world.

• The long-term average price for Australian cotton (21 years, 1991 – 2011) is $460 per bale. (source: Rabobank, Cotton Conference Presentation 2012) • There is a forward market for cotton in Australia where growers can sell their cotton at a fixed price, up to three years ahead. (source: Australian Cotton Shippers Association, Cotton Conference Presentation 2012).

• cottonaustralia.com.au

COTTON INDUSTRY

so we need to harness that knowledge to set some direction into research for the next five, 10 and 20 years,” he says.

Ian says over the past six months, a small but very committed group of dryland growers and consultants have worked with a researcher to develop a project to be put into this year’s round of Cotton Research and Development Corporation (CRDC) programs.

“It is a systems trial incorporating new treatments to manage crop growth,” Ian says.

Extension and development agronomist for Cotton Seed Distributors, Rob Eveleigh, says it’s time for the industry to take the opportunities for dryland cotton seriously.

“At a time when the challenges facing farmers continue to increase,

dryland cotton offers a number of benefits,” says.

“It generates new revenue opportunities, provides greater flexibility in crop rotation strategies and contributes to sustainable land management.

“Pretty much anywhere you can grow grain sorghum, cotton can be grown as a reliable alternative summer crop,” he says.

“It has the capacity to handle extreme heat and is indeterminate, which means it fruits over a long period of time and can take advantage of rain for a longer time than sorghum and other dryland summer crops.

“Where sorghum doesn’t like hot dry conditions at flowering, cotton can flower for an extended period of time.

“Cotton has a very good fit in summer farming systems,” Rob says.

But agronomic issues such as loss of soil moisture from pupae busting, high input costs and a dry soil profile at the end of the season are challenges that need to be resolved.

Narribri agronomist Drew Penberthy from PenAgCon believes dryland cotton production would benefit from a dedicated research and development focus.

“Growers are keen to try dryland cotton because of its benefits in the farming system, but improvements need to be made so that it utilises summer rainfall more efficiently,” he says.

“Cover cropping after the crop to improve infiltration rates on soils; canopy manipulation; and pupae management are just some of the areas that would resolve some major production challenges,” he says.

Dryland cotton generates new revenue opportunities, provides greater flexibility in crop rotation strategies and contributes to sustainable land management.

BUYERS OF COTTON DIRECT FROM THE GROWER • Financial security • Reliable alternative • Global network CONTACT THE LOCAL TEAM: Nick Kelly Toowoomba, QLD

Matthew Keeley Narrabri, NSW

Mark Nixon Melbourne, VIC

07 4638 0611

02 6790 7109

03 9864 2053

1300 453 626

(1300 GLENCORE)

www.glencoregrain.com.au

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