SEVERE frost events and growing concerns about a lack of moisture in Western Australia and some of the few pockets of southern Australia expecting reasonable yields will knock further production off an already drought-depleted national grain harvest.
The further cuts to likely production will place further strain on supply and demand balance sheets for domestic grain end users, especially on the east coast.
While industry analysts say there will be enough grain to meet domestic demand, the market has shown there is scope for further price rises, even at already inflated values.
On Monday, after the news of the WA frost was digested cash prices kicked between $3 and $6 a tonne, with the largest increase in the Port Kembla port zone, where wheat prices hit $465/t, while the ASX January 19 east coast contact kicked $8.50/t to $434.50/t.
The market has been banking on good availability of supply from Western Australia with late winter estimates flagging close to record total production in the west.
However, just weeks after the potential for an 18 million tonne Western Australian grain crop was raised, forecasters are rapidly scaling back their numbers on the back of a prolonged dry period in key production zones and a severe frost through parts of the southern cropping belt.
Mike Lamond of the Grain Industry Association of Western Australia (GIWA) said factoring in frost and dry the WA crop could drop to 14m tonnes.
“We don’t know just how much the frost will hit the crop, but the dry is a big problem, the headlines have been on the frost but we could easily see the dry being the major factor in yield losses,” Mr Lamond said.
Following the bitter frost, which saw temperatures drop to -4 in parts of the upper Great Southern, Mr Lamond said he expected barley to be the crop hardest hit by frost.
“We could easily lose 500,000 tonnes of barley, it is more advanced than wheat and at a more susceptible stage,” he said.
In terms of wheat damage, Mr Lamond said it was not likely there would be much head damage as most of the crop was yet to come out in ear.
“We have some concerns about stem frost, but that is something we are not that familiar with in WA so we will have to wait to see whether there are any problems on that front.”
Scott Crosby farms at Nyabing in the upper Great Southern, east of Katanning.
He said it had got down to close to -5 degrees for a period of time on his farm.
“It is a bit early to tell the complete damage but it is safe to say it is a major event,” Mr Crosby said.
While Mr Lamond does not expect wheat frost damage to be as severe as in barley he said GIWA’s wheat production number of 10.2m tonnes for WA would definitely be under fire.
“There definitely is risk to the downside on that figure, more so from the dry than the frost.”
“Big areas in the eastern Kwinana port zone from Merredin up to Koorda, the crops there were looking sensational but have gone backwards with the dry September, we could easily lose a million tonnes of total grain production in that area alone from earlier estimates.”
In Victoria, freezing temperatures on Saturday and Sunday night have left Wimmera farmers concerned that moisture-stressed crops will now be subject to significant frost damage.
Official Bureau of Meteorology (BOM) readings dipped to -3.3 at Longerenong on Saturday night, while unofficial weather stations on the Wimmera Plains recorded figures lower than that as the region shivered through one of its coldest September nights on record.
Wimmera crops still had some grain yield potential but many growers are now looking at cutting for hay following the frost and with no significant rainfall forecast for at least the next week.
Scott Arnold, who farms at Rupanyup North, said it was too early to see visual damage in crops but added he was nervous, particularly as plants were already moisture stressed.
“We generally see the worst damage when there is not much moisture for the crops and unfortunately that is what has happened here.”
The past week has also seen heavy frosts in parts of South Australia, through the Mallee region and NSW, on the Central Tablelands.