General Comments (October 2019)

Adverse seasonal conditions have again led to many crops being cut for hay, in response to continued demand for hay from graziers unable to harvest, grow or make hay themselves. However, cutting hay even earlier than in previous drought years has presented some challenges in terms of achieving sufficiently low moisture content to allow baling safely. Managing counterparty risk with buyers of hay has also presented challenges.

There has been a wide variation in crop performance again in 2019, with the main explanation for better crop growth being stored soil moisture from summer/autumn rain due to ground cover, which has allowed earlier sowing and crop emergence. This is particularly the case with canola, which is consistent with previous experience.

Barley in general is again the standout crop. This appears to be partly due to barley’s inherent better water use efficiency and higher harvest index compared to wheat, plus the fact that most barley has been grown following wheat in 2018 which left more ground cover, compared with wheat following canola where there was little ground cover,  especially if the canola was cut for hay in 2018.

Feed budgeting will be very important for livestock producers, to calculate how they may carry retained stock through until it is reasonable to expect adequate paddock feed next year. Given the substantial investment in perennial pastures, including lucerne, it is essential that the majority of these are managed during the coming months to preserve this asset. This will require the use of drought-lots or sacrifice paddocks with a good water supply, in which stock can be hand-fed.

Priority for grazing perennial pastures should be given to young stock which have a higher protein requirement, provided that these pastures are grazed on a rotational basis to preserve groundcover and maximise the chance of pasture recovery.

Many clients’ income will be down to the extent that additional working capital will be required for 2020. Communication with bankers earlier rather than later is advised if this is the case, to allow the bank plenty of time to have funds available. The credit application process appears to be slower than previously, due to a reduction in bank staff, plus additional steps in banks’ internal processes, supposedly due to the Royal Commission into banking.