Sydney
18 June 2008
The most severe drought for 100 years in Australia is getting worse. Farmers warn that this winter's wheat crop could be even smaller thanlast year's if rain does not come soon. Most Australian grain isexported and empty Outback grain silos have contributed to shortagesand rising global prices. Australia is the third-biggest wheatexporter behind the U.S. and Canada. From Sydney, Phil Mercer reports.
With the drought showing no signs of easing, Australian farmers say the chances of a bumper wheat crop this year look slim.
JockLawrie is the president of the New South Wales Farmers' Association. Hesays that good rains at start of the sowing season did not last.
"But,of course, we had a very dry autumn right across many parts of NewSouth Wales," Lawrie noted. "It's knocking some of the forecasts ofproduction down. There's no doubt they were anticipating a good wintercrop but as time went by, of course, those figures get knocked backdown and they still will continue to get knocked down until we get agood widespread rain right across the wheat-growing belt."
Thedrought - known here as the "Big Dry" - has forced more than 10,000Australian farming families off the land over the past five years.
Australianfarmers are in the middle of the growing season for their winter wheat- a crop that is planted as the weather starts to cool in April or so,and then is harvested early in the warm summer months, toward the endof the year.
Wheat farmers in New South Wales - thesecond-biggest wheat growing area in Australia - have seen yieldsshrink dramatically. And the situation elsewhere in the country is notmuch better.
Much of Australia's wheat harvest is sold overseas, mainly to the Middle East and Asia.
Lastyear's poor harvest contributed to the current international foodcrisis - with tight supplies and increasing demand forcing priceshigher.
Ian MacDonald is the New South Wales Minister for Primary Industries.
"Upuntil 2002, the five-year average (harvest) was around 5.7 milliontons, a large percentage of that wheat then being exported," MacDonaldexplained. "However, for instance, last year it was one-point-eightmillion tons, so there's a huge shortfall there that is obviously notgoing onto the international market and therefore would be putting - inconjunction with a number of other factors - pressure and upwardmovement in prices globally."
Australian officials have cut thisyear's wheat output forecast by about nine percent to just under 24million tons. The amount of barley produced is also likely to be belowprevious estimates.
There is better news for the next ricecrop, which is expected to hit 253,000 tons. That is up considerablyfrom the paltry 19,000 tons that was just harvested, after the droughthad reduced irrigation water supplies.
Australia's canola harvest is also expected to exceed last year's figure.
Ian Macdonald says farmers still face great uncertainty.
"Hopefullywe can get some decent rain although it's not looking very good, with62 percent of New South Wales in drought and only 13 percentsatisfactory. So, the outlook at this point is rather bleak to say theleast," he said.
Australians are not immune from inflationaryeffect of world grain shortages. Grocery bills here have soared 45percent in the past decade.
Christopher Zinn from the consumergroup, Choice, says Australians are generally an optimistic bunch andwill be hoping that the problems will end soon.
"We're stillcushioned and we're still the Lucky Country in so many ways but theserealities - these global realities - are really coming home with avengeance now," Zinn said. "So, I think that there is a reality checkgoing on - might be uncomfortable. Hopefully, that mythology of theLucky Country, people hope they'll steer their way through. But we'llsee how long it lasts and how fast basically the price increases keepcoming through."
News about Australia's shrinking wheat cropcomes just as heavy rains and floods in the United States havedestroyed millions of hectares of corn and soybean crops. The U.S.government expects the corn crop to be 10 percent lower than lastyear's harvest.
Australian wheat farmers who do manage toproduce a healthy crop this year hope to take advantage of recordprices on international markets. They are, though, unlikely to enjoy ahandsome pay day. Any profit they make will be reduced by the highcost of fuel and fertilizers.