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    Lah farmer David Drage.

AgLife: Barley growers look for alternatives


Wimmera cropping market analysts are recommending farmers shore-up domestic trade deals or ensure better on-site storage for their barley crop as uncertainty looms in the international market. 

Rural Bank Australia says the imposition of an 80.5 percent tariff on Australian barley imports is likely to price Australia out of the Chinese market, which accounted for 70 percent of Australian barley exports over the past five years. 

Victorian Farmers Federation Warracknabeal branch president David Drage finished cropping the last of his barley, his main crop, before China announced the price hike to tariffs. 

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Mr Drage said despite the uncertainty he was confident there would be alternative deals farmers could secure moving forward. 

“We just have to wear the market this year – it’s certainly a concern, but we’ll get by,” he said. 

“China isn’t the only country that takes our barley. We’ve got our Indonesia free trade agreement and India has indicated they are happy to start buying significant quantities of grain from us.”

Mr Drage said he believed ensuring alternative trade partners was crucial for farmers. 

“We had a similar situation around the Gulf War, Iraq was a major buyer of our barley. Overnight we lost that corner of the world to sell grain to,” he said.

“We soon found other places to sell to. It’s just another reminder of why you can’t be too committed to having one country as your market.

“There’s a lot of facets that make up the price of what’s eventually offered to us on grain, this is when all the work that the government does in keeping multiple markets open to us comes to fruition.” 

Rural Bank Horsham’s senior agribusiness relationship manager Marc Thomas said many Wimmera farmers he worked with had changed to another commodity mid-cropping.  

However, Mr Thomas said farmers who continued cropping barley were now looking at improving storage options or forward planning with their trade deals. 

“The tariffs came in mid-cropping, so we’ve had a few clients swap or convert the barley over to another commodity, whereas others have kept going with their plan,” he said. 

“The price will be impacted. A strategy to have an on-farm storage option if they can hold it or budgeting for lower prices is what a lot of our clients are doing now.

“A lot of clients might now be looking at forward contracting grain sales. 

“If they can secure a decent price now, they could lock that in to minimise some of that risk rather than leaving it to harvest time.”

Mr Thomas said farmers were likely to look on to more trading opportunities in the domestic market. 

“Domestically there might be other opportunities open up, while the possibility of other international opportunities open up as well,” he said. 

“We’d like to remain optimistic about it, there’s a fair bit of water to go under the bridge before they do go ahead and sell it. 

“Yes the barley price has dropped off now, but we’ve still got six months until farmers will harvest that crop.” 

The entire June 24, 2020 edition of The Weekly Advertiser is available online. READ IT HERE!

The entire June 24, 2020 edition of AgLife is available online. READ IT HERE!