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Farmers look for spring rains to lift prospects

14 September 2009

THE onset of spring has refocused farmer’s attention to the domestic seasonal conditions during September, often referred to as the ‘money month’. The Westpac-NFF Commodity Index moved slightly down during August, recording a drop of 2.5% for the month.

While international commodity markets fluctuate and can underpin confidence levels in the sector, it is the key role that local weather conditions play in generating production and, thus, revenue that really drives the returns from agriculture.

National Farmers’ Federation (NFF) Vice-President Charles Burke stated: “While some regions across Australia have received a great start to the season, many are now eagerly waiting follow-up spring rains to kick-start crop and pasture growth as the weather warms.

“Across the country, spring rain is needed to secure the winter harvest and generate returns for farmers. In August across NSW and Queensland, records were set in many regions for high temperatures coupled with low rainfall. The next two months will therefore be critical for Australia’s farmers. It is encouraging that there was good rainfall across NSW and Queensland in the first week of September.”

Westpac Senior Agribusiness Economist Andrew Hanlan added: “Australian farmers are better positioned than ever before to effectively deal with the challenges brought by fluctuations in the weather.

“Risk management is now an integral part of every farm business and the various financial instruments available to farmers to manage this play a critical role this time of year.

“Our primary producers have demonstrated time and time again that they can reliably meet the increasingly complex needs of their domestic and export customers, in the face of erratic climate conditions.

“Clearly, commodity markets are showing signs of stabilisation following a very tumultuous period for all global commodities. The focus for Australian farmers is very much on the domestic season.”

Over August 2009, the Westpac-NFF Commodity Index decreased by 2.5%. The Index is now 17.6% lower than a year ago. International commodity prices moderating in the month were wheat (-8.4%), barley (-4.9%), cotton (-3.6%), beef (-4.5%) and also dairy (-1.5%). Commodity prices that lifted during August included sugar (17.6%), canola (1.3%), and wool (2.1%).

[ENDS]

The Westpac-NFF Commodity Index is weighted according to the value of Australian agricultural exports and includes only rural commodities – unlike other price indices that are overshadowed by oil, mineral and energy prices. It provides daily movements based on prices of Australia’s eight key farm exports – barley, beef, canola, cotton, dairy, sugar, wheat and wool – in both $US and $A.

Media Enquiries: Brett Heffernan on (02) 6273 3855 or 0408 448 250.

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