Farming future to the state’s rescue

17 Aug 2015 The Advertiser NIGEL AUSTIN RURAL EDITOR

” No one should be naive about the immense challenge the state faces, but this agricultural revival should give us confidence that we have the capacity to face it.”

Timely rainfalls across regional South Australia set to provide $450 million agricultural windfall

TIMELY soaking rain will add at least $450 million to this season’s crop production, boosting confidence across regional South Australia and inspiring hopes of a bumper grain season.

Crucially, rain over the last month has at least delayed the threat of El Niño weather conditions and helped lift the outlook for all rural sectors.

In one of the most optimistic signs for the agricultural sector, its buoyant prospects and a surge in commodities prices are drawing more young people back to the land, in the strongest show of support for a generation. TIMELY soaking rain across a large part of the cropping belt will be worth at least $450 million in extra production, boosting confidence across regional South Australia and bringing the promise of another outstanding grain season.

Importantly, rain over the last month has at least delayed the threat of El Niño weather conditions and helped lift the outlook for all of the state’s rural sectors.

In one of the most optimistic signs for the growing agricultural sector, its increasingly buoyant prospects are drawing more young people back on to the land in the brightest show of support for a generation.

The rising confidence coincides with strong prospects which have rarely, if ever, been better for the rural sector.

Prices for many commodities are reaching high levels as a result of strong international consumer demand for food and fibre.

Grain Producers South Australia chief executive Darren Arney said the recent rain had lifted the state’s crop potential by 1.5 million tonnes, worth about $450 million.

“It has taken us from below-average to average or above and set us up nicely for spring, but it depends what happens in the next two months,” Mr Arney said.

“It’s hard to tell if we will get above-average crops given the predictions for El Niño, but six weeks ago, a forecast for an average crop would have been fantastic. An average crop is looking much more likely now.

“The rain has really filled the soil moisture profile and many farmers are sitting on average growing season rain and are cautiously optimistic.”

The return of young people is helping create enthusiasm, driving the adoption of new approaches and a further resurgence of the industry.

It follows rising international prospects for many Australian agricultural, food and fibre products, aided by rising demand for quality food and the falling Australian dollar.

The unprecedented international demand for food is helping the agricultural sector retain its position as the mainstay of the state’s economy, with production of many products rising as prices lift.

Sheep, cattle, wool, almonds and crops such as lentils have rarely attracted higher prices.

Record agricultural exports are helping to bolster the state’s economy as the industry reaffirms its importance. The expansion of agricultural produce and increased valueadding by the fast-growing food manufacturing sector is further boosting the economy.

The resurgence has seen the state’s meat exports soar by 35 per cent to $1.3 billion in 2014-15, while fruit and vegetable shipments are also growing rapidly, reaching $500 million for the year, due largely to almonds and citrus.

The value of other commodities is also rising. Wool exports are up 19 per cent, while the price of smaller crops such as chick peas and faba beans are at high levels.

The one downside is a lack of sufficient rain in parts of the South-East, the Mallee and some of the more marginal areas of the grain-growing belt.

Livestock SA president Geoff Power said the rising optimism was highlighted by the return of more young people to the land than has been the case for a generation.

“I see an extremely bright future for agriculture and many more young people are coming back to the land because they see a bright future,” Mr Power said.

Cattle, sheep and wool prices are excellent and at some of the highest levels achieved for many years, he said.

“The wool market had a terrific lift last week, driven by a lack of supply, with the market rising by about 80 cents a kilogram in the past couple of weeks to more than $13kg,” Mr Power said. “One of the reasons is the US economy has picked up, while the Japanese share market is the best it’s been for years and we are seeing a real resurgence around the world for knitwear.”

Yorke Peninsula Field Days president Paul Correll said that this year’s crops on the peninsula looked “really positive” and might be even better than last year’s.

Mr Correll said good rain at the right time had made up for shortages during the growing season.

“It is shaping up to be a better year than last year when it stopped raining at the very start of August, whereas this year it appears to be continuing for much longer,” he said.

Mr Correll farms with his twin brother David and their two sons, Sam and Tim.

“To have the next generation home on the farm is a great asset to the business and gives us a lot of confidence to invest, having such a good workforce,” he said. FOR all the bad news about the state’s unemployment rate and job-shedding in the manufacturing and mining sectors, agriculture remains a strong foundation for South Australia and offers immense growth potential.

Recent rains and chilling weather have been a source of complaint in Adelaide, but look set to boost confidence and output in the regions, where there are hopes of a bumper crop that will inject hundreds of millions of dollars into an economy that needs to maximise its existing strengths while looking to build new industries.

Positive anecdotal evidence shows the rebound in agriculture is attracting the next generation to remain or return to the farm and work in an industry that was SA’s first economic strength and a great hope for the future.

Predicting where markets will move is a fraught game.

However, there are clear trends emerging across the globe which give the state’s business and policy-makers good reason to be bullish about betting on the food, wine, fibre and wine sectors.

China has emerged, on our doorstop, as a global powerhouse. Its incredible industrial expansion in the past two decades is lifting some of the world’s poorest people out of suffering, while creating what will become the globe’s biggest middle class in numerical terms.

Nearby, India is growing in stature and rapidly developing a taste for the luxuries many of us take for granted.

Together, they offer billions of buyers for the worldclass products that SA already produces, and reason to invest in growing our output and quality to attract new investment in the state.

Premier Jay Weatherill yesterday jetted off for a week-long trade mission to South East Asia, boasting it is the biggest tour of its kind to the region in SA’s history.

Paired with the China mission earlier this year, it is a positive sign that substantial energy is being put into creating a new future as the old economy rapidly ages.

 

No one should be naive about the immense challenge the state faces, but this agricultural revival should give us confidence that we have the capacity to face it.