Wheat prices soar on supply forecast

Report: Liz Rodway
Wheat prices have soared to a record $450 a tonne.The latest increase is due to America's wheat stocks dropping to a sixty year low.The report has revised wheat stocks lower - down 40 per cent on last year to seven and a half million tonnes and now, for the first time in history, wheat is trading above 10 US dollars a bushel.Richard Koch managing director from ProFarmer says there are some real benefits for Australian grain growers. "It's very positive for Australian grain growers," he says. "They should benefit through increased pool prices for the 07/08 crop and through another lift in the domestic prices via high prices for the container trade and on wheat that will be sourced to fill the bulk export licenses recently issued by the Minister."Also the big rally has carried through for new crop pricing which augers well for prices in the coming year," he says. Temora grain grower Angus McLaren is planning to put in 2200 hectares of wheat this year.While the good returns on wheat will be offset slightly by high input costs, he's hoping the prices will remain high. "Oh look I'm feeling very bullish actually," he says."Obviously those figures are being reflected in the current prices for wheat. "We're seeing Chicago wheat trade over $10 a bushel which is the first time that's ever happened in history. "I guess there's a little bit of nervousness that those prices won't be around when it comes to harvest for us this year because obviously it's going to encourage wall to wall wheat right around the world but fingers are crossed. "I think the situation has never been more positive and if we can get a crop this year and good prices are maintained then it will make up for the two disappointing years we've had." While the higher grain prices have been welcomed by one of Tasmania's largest grain producers, Ian McKinnon, he warns that the Tasmanian drought, combined with higher input prices will erode the returns."You are actually looking at farmers with very low yields, in some cases, no yields at all, so I think it's got to be looked at in that context.....so it's not all good news" he said.
In this report: Richard Koch, managing director, ProFarmer; Angus McLaren, grain grower, Temora, NSW, Ian McKinnon, grain grower from northern Tasmania.