Barley growers stick to their guns

Barley growers stick to their guns

Grain
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The shock Chinese announcement about barley tariffs is unlikely to significantly alter barley plantings this year.

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Daniel Keam, Wallup, Victoria, says he believes the situation regarding China and its stance on Australian barley could change so it is little point altering his rotation to adjust to the news.

Daniel Keam, Wallup, Victoria, says he believes the situation regarding China and its stance on Australian barley could change so it is little point altering his rotation to adjust to the news.

AUSTRALIAN barley producers are concerned at the news China plans to slap hefty tariffs on Aussie barley but the bombshell findings are unlikely to mean major changes to this year's rotation.

"The timing of the Chinese announcement has come when farmers are literally putting barley in the ground," said Grain Producers Australia chairman Andrew Weidemann.

"It means it comes too late for many to change to something with better marketing prospects, but even if there had been an option farmers will generally stick with their rotation," Mr Weidemann said.

He said farmers did not view prices in May as a factor in their planting decisions.

"The fact is a lot can happen between now and harvest."

Mr Weidemann also said that following two poor years on the east coast barley supplies were low.

"We'd obviously rather not be in this position but China is far from the only market for our barley."

"Domestically there will be a lot of buyers looking to replenish their storages which will provide demand."

Greg Kuchel, Rural Bank regional agribusiness manager, said there would be some areas worse impacted than others by the China announcement.

On the east coast he said the domestic market would provide demand, but in export-focused WA and SA he said the drop in pricing could be more pronounced.

"There will be a lot of interstate difference and I think WA could feel the worst of it but on the flip side, we are coming off high prices and the values for other commodities such as wheat are still not too bad," Mr Kuchel said.

He also reiterated the upcoming harvest was still months away and that much could happen before farmers had physical barley to sell.

"We've got to produce a crop here and we've also got to see what happens in the northern hemisphere, there are areas that are a bit dry and that could change global supply and demand patterns."

He said while it had long been known China was investigating Australia's barley exporting program the severity of the measures had caught some by surprise.

"The general consensus was that it was likely to be more of a rap over the knuckles, this basically makes it impossible to compete with other exporters into China."

However, he said he did not think it would alter cropping programs in a significant way.

"A week ago there was a chance people would alter their program, it is too late now for most people."

Andrew Whitelaw, Mecardo commodity analyst, said there was still scope for some in later sowing regions to swap out of barley but added it would be contingent on having suitable replacement seed and the new crop meeting rotational requirements.

David Drage, Lah, is sticking to his barley rotation this season in spite of a big fall in values in the wake of the announcement of likely Chinese tariffs.

David Drage, Lah, is sticking to his barley rotation this season in spite of a big fall in values in the wake of the announcement of likely Chinese tariffs.

David Drage, a farmer at Lah, in Victoria's northern Wimmera, said he felt farmers would stick to fixed rotations.

"This news is concerning but there has been the feeling all year that barley prices would fall," Mr Drage said

"Farmers will make their decisions come harvest, but if the price is still low then you would expect many people would look to store their grain to maximise their returns.

"We saw what happened after the big 2016 year barley was worth very little but then after the droughts there was good money in it, so that favoured people that held on for a bit."

"It could also work out, if the season continues to be favourable, that some people will think that even with a price under $200 a tonne that the margins are good enough to sell if they are growing five or six tonnes to the hectare, it's all going to depend on individual circumstances."

Mr Whitelaw said farmers were increasingly looking further out with their marketing.

"The signs are good for this year, but this is Australia and there will be other droughts, so for those with access to the domestic market they will look at the longer term."

Daniel Keam, farmer at Wallup, north of Horsham in Victoria, said he was sticking to his current rotation.

"I'm planting barley now and while it's not ideal to see a big market like China shut up there's no guarantee the tariffs will still be in place by the time we sell," Mr Keam said.

"It's a matter of who needs who most and while there looks like being plenty of barley and other feed grain to source at the moment that could all change by then."

"You'd be mad to change up what you are doing in terms of planting on something so volatile as the pricing in May."

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