Australian farmers have sown a record 2.9 million hectares of canola mid optimism about pricing and early rainfall events. On the back of a global shortage of oilseeds, farmers are hedging their bets with Western Australian growers committing to grow canola on across 1.5 million hectares.
The increase in plantings and records prices could see the Australian economy net $2 billion at harvest time.
“In in 2006 – 07 the price was around $667 per tonne, it peaked at that, in today’s dollar terms that’s about 854, so it’s just under that,” said Michael Lamond, the author of a recent report for the Grains Industry Association of Western Australia.
“So it’s the prices we are getting for canola at the moment are the second highest ever on record and that has fuelled the extra canola area that has gone in,” he added.
“[Western Australian growers] have had a an early break with subsoil moisture, and when you have that you have a lot of confidence in that the outcome will be that your yields will be above average.”
Good Pickings for Cotton Growers
Good opening rains across the country have benefited many agricultural sectors with cotton growers also likely to experience a record 2021 harvest.
This year’s national cotton crop is set to be worth $1.5 billion, a relief for many farmers recovering from drought and the effects of other natural disasters. In 2020, the national cotton crop was just 600,000 bales – a 40-year-low.
Stuart Armitage, a farmer from Cecil Plains in Southern Queensland, said the improvement in conditions was a welcome relief for growers who have suffered through a prolonged drought.
“You’ll see the Darling Downs has its biggest cotton year for quite a number of years and even Australia-wide it’s going to be one of the biggest,” Mr Armitage said.
“It’s going to be a big season around here. Most people you talk to are going to be increasing their acreage by 50 to 100 per cent and some could be 200 to 300 per cent. So next cotton season is going to be a big one.”
No Aussie Cotton for China
While many cotton growers breathe a sigh of relief, market access is still an issue requiring attention amid declining relationships between Australia and China.
The Chinese market was once worth $800 million a year in Australian cotton sales alone. This year, China has banned Chinese mills from buying Australian cotton altogether.
“[Chinese mills] were contacted by Chinese government officials and told if they purchased Australian cotton they’d be penalised … in the form of not receiving tariff-free quota the next season. So it’s a strong disincentive,” said Adam Kay, chief executive of Cotton Australia.
“China did take 70 per cent of our crop but there are other markets there and those cotton shippers are working very hard on developing new markets and increasing existing markets.”
Mr Kay noted that the industry needed to work on diversifying trade partnerships in order to mitigate potential losses from the closure of China.
“(They’re looking at) places like Vietnam, Bangladesh, Indonesia, Thailand, South Korea, and working really hard on getting that crop in there, trying to displace cotton (purchases) from our competitors like the US and Brazil.”
The global price for cotton remains positive at around $550 a bale, but a record harvest will increase the need to secure new markets as supply levels return to normal.