Beyond Agronomy News: February 13th, 2008
Agronomy
I spent the day travelling around the Murrumbidgee Irrigation Area (MIA) in the southwest corner of New South Wales. Murrumbidgee means "water that never fails." Ironically, farmers have had their irrigation cut off for two years now because of the drought. The majority of fields lie in a heap of weeds instead of a rice, cotton or corn. I can't imagine having the capital outlay of an irrigation system in place only to have zero water allocation for two years and no rain in four years. Yet, the farmers are resilient and optimistic for 2008! The rain has come back during a time when heat and dry weather are usually the norm.
Historically, a similar statement was made about the Leeton area and the Palliser Triangle- no man should grow anything here in this desert! Well, along came the early 1900's and irrigation was brought to this desert land which now produces walnuts, oranges, grapes, corn, sorghum, wheat and rice to name a few crops.
The Murrumbidgee, Coleambally and Murray Irrigation Areas are the only rice growing areas in Australia. In fact, the amount of rice grown in this small area would normally feed 60 million people per year. The rice production has been virtually wiped out the last few years with the ongoing drought.
We visited a newly planted walnut grove that covered 2,000 acres. Preparation for planting and production of walnuts is intense. The entire landscape has been leveled by machinery, a 100 million gallon reservoir installed and drip irrigation lines all for the handsome price of 24 million dollars or $13,000 an acre. The kicker is that there will be no walnuts harvested for a minimum of five years; full production starts at 7 years. The plantation was owned by a group of investors, Webster's Walnuts, from Tasmania. The potential returns are $7,000 a tonne with an average yield of 1.4 tonnes per hectare with the potential of 2 tonnes per hectare. That works out to $4,000 to $5,000 an acre per year.
There's dryland farming throughout the area with large fields of 100 to 300 acre in size. The majority of the farming practices are conventional with cultivation being used to prep the land for seeding. I would have expected a drought prone region to adopt zero-till practices quickly but it hasn't happened here yet. The typical dryland crops are wheat, canola, oats, barley and to a small extent peas, fababeans and lupins.
I did see the usual red, yellow and green coloured machinery. This is a picture of a Morris drill from a Morris dealer in the area. If you want to see a list of new and used equipment, you can log on to
to check out a wide list of machinery prices.
www.farmhub.com.au
ITo give you an idea of Aussie machinery prices, here's a list of the most common pieces:
Outback S-Lite light bar guidance system: $1,850
Trimble CNH IntelliSteer: $15,000
JD 9750: 1,200 hrs with 30ft header: $187,000
NH 9682 4WD: 5,485 hrs: $100,000
Case STX 375 4WD: 1,100 hrs: $231,000
Case 2388: 1,300 hrs: $208,000
JD 1895: 43ft disk drill on 10" spacing, 340bu tank: $275,000
Carbon Credit Trading Begins in Oz
The carbon credit market is emerging in this country as well with New South Wales out of the gate first, very similar to Alberta. I've found two companies called CarbonSmart and C02 Australia who provide a low-risk, low management and low-cost way for farmers to enter the carbon market. The protocols that have been set up involve the planting of trees to store carbon. A farmer is paid annually and receives 60% of the sale price of the carbon retained on their property. There are a number of criteria to meet for planting and maintaining the tree plantations. What I found interesting was the clause that stated all carbon must remain on the site for at least 100 years after the final trade of carbon. I hope they don't get a bush fire! SL
For more information: www.carbonsmart.com.au and www.co2australia.com.au
Popular Reading for Farmers
There is a popular farming magazine here called "Kondinin Group Farming Ahead". You can check it out at www.kondinin.com.au.
The most popular farming newspaper in this area is called "The Land" and can be seen at
www.theland.com.au. I think it would be the equivalent to our Western Producer.
Real Estate Links:
www.rodwells.com.au
www.elders.com.au/wagga
www.riverina.coop
www.landmark.com.au
www.rawbrown.com.au
www.cwrural.com.au
www.stockrural.com.au
www.raywhiterural.com
Fertilizer Inquiry Promised
It seems the Aussie's are feeling the same fertilizer price squeeze as we are, only worse! There's a competition bureau from the Australian government looking into the skyrocketing fertilizer costs to determine if there is any price gouging going on. The cost of NH3 today is $1,200 a tonne. The price for MAP or 11-52-0-0 phosphate is $1,240 a tonne. The price of urea 46-0-0 is $680 a tonne. The price of MAP in 2006-07 was $440 a tonne. SL
The Cost of Farming
I visited two large 50,000 acre farms who I will be profiling next week who were kind enough to share some of their custom farming rates. It seemed like many producers hire custom contractors to seed, spray and harvest for them. I was told that you don't want to be over capitalized because you have all that money tied up in a depreciating asset. I smile and nodded. Here's a list of custom rates, with the farmer supplying fuel to the contractor:
Contract Seeding
Wheat: $20.25/ac
Corn: $18.25/ac
Cotton: $18.25/ac
Contract Rates
Deep ripping: $22.25/ac
NH3 application: $19.50/ac
Contract Spraying
Ground applicator: $4.00/ac
Aerial applicator: $3.70/ac
Contract Harvesting
Wheat: $14.70/T or $0.40/bu (Example: 50 bushel wheat crop = $20.00/ac)
Corn: $12.70/T or $0.35/bu
Cotton: $140/ac
Fertilizer and Crop Inputs
46-0-0: $680/T
11-52-0-0: $1,240/T
NH3: $1,200/T
Diesel: $1.43/L
Gasoline: $1.45/L
Farm diesel: $1.05/L
Corn seed: $5.00/lb
Expected Yields and Returns
Dry land wheat: $210/ac Avg Yield: 37bu/ac
Irrigated wheat: $325/ac Avg Yield: 74bu/ac
Irrigated corn: $850/ac Avg Yield: 170bu/ac
Irrigated cotton: $1,000/ac Avg Yield: 4 bales/ac (227kg per bale)
Aussie's Debating GMO's: Big Topic
I wasn't in the door five minutes at my uncle's place and he asked me, "So what's your take on GMO's?" I quickly learned that I must be ready for every Aussie to ask me the same thing. There is a lot of fear mongering in the media as usual and the biggest argument I've come across so far is that GMO's might cause genetic or health defects in humans and the GMO varieties could take over the landscape. The fear of the unknown has everyone in a stir but the fear is valid.
The Aussies have had many things introduced into their ecosystem, only to have the species explode and ruin the countryside. For instance, the cane toad is great example of an introduced species that upset certain ecosystems by taking over and killing specific wildlife. The prickly pear cactus was introduced at one time into NSW and it took over pastures with no natural enemies in the area. So, I can see why the Aussies are a little nervous.
I've been explaining the benefits we've gained through the use of GMO's and mentioned that none of us have seen any three headed children yet. I also mentioned that I've worked with GMO canola for over 10 years and pastures, roadsides and fields are not rampant with mutant crosses of super canola plants. I suggested that for 40 cents of 2,4-D we can clean up the volunteers. After asking for the canola yield in the area, I was told that irrigated canola will run roughly 1.7 tonnes per hectare, which is 30 bushels per acre. The gentleman's eyes popped open when I told him our irrigated canola can produce up to 80 bushels an acre and some dryland canola has produced over 80 bushels.
My recommendation to the Aussies is to keep their GMO free status and cater to the European and non-GMO market. They can extract a premium for their canola and stay out of the race to commoditize their grain like we have. Incidentally, that strategy will keep Canada's biggest competitor from gaining 30% yield increases and from over supplying the world market. Okay, so I'm a little bias with my suggestion but I think it's a win-win. SL
Market News
Almost Half of Aussie Farmers Can't Finance Coming Winter Crop
A survey of 1,800 grain growers in Victoria, NSW and Queensland has found nearly half the respondents have not yet secured sufficient finance to establish this year's winter crop. The funding shortfall follows year's drought and failed crops, which is limiting farmers' ability to finance the expense of planting this season. The Grain Growers Association conducted the survey of its members in October 2007 and found 68% believe their financial situation is worse than five years ago.
Full story: http://theland.farmonline.com.au/news_daily.asp?ag_id=48610
Half of NSW Eases Out of Drought
The "big dry" is easing in NSW, says Premier Morris Iemma, as latest figures show more than half of the State is no longer drought declared. NSW Department of Primary Industries analysis for January shows 46% of the State is classified as in drought. The figure is down from 52.6% in December, coming after a welcome bout of drenching rain. "The big dry that has gripped NSW is coming to an end," Mr Iemma said. "For the first time in seven years, many parts of Western NSW (are) out of drought with the drenching rain in recent times. "We're not there yet, but there is real hope that 2008 will see an end to the worst drought in more than 100 years." A drought map also provided by the department shows 32.9% of the State is rated as "satisfactory" and most of this green zone stretches down NSW's coast, and inland in the State's north.
Full story: http://theland.farmonline.com.au/news_daily.asp?ag_id=48587
Australia's GM Crop Ban Heats Up
The polarizing effect of the debate over the future planting of genetically modified crops has been highlighted by the reaction to South Australia's decision to extend its ban on the technology. The decision has been slammed by some scientists, but welcomed by the pro-organic movement. The Gene Ethics Network says the decision to extend SA's moratoria for at least another two years should be a wakeup call to Victoria and NSW, which have decided to drop their bans. "Victoria and NSW would be grossly irresponsible to allow Monsanto, Bayer and Nufarm to play Genetic Roulette in our GM-free environment," says Gene Ethics Director, Bob Phelps. "The overwhelming weight of evidence shows that markets will be adversely affected in Europe and Asia by contaminating our food exports with GM products. And ABARE says our GM-free will earn premiums.
Full story: http://theland.farmonline.com.au/news_daily.asp?ag_id=48611
Organics Has Front Running as Farming Focus Shifts to Carbon Emissions
Organic and biodynamic farmers emerge as particularly strong contenders in an environmentally focus approach to land management-and believe they occupy a position that could deliver lucrative benefits as the inherent value of ecological practices rise. A light carbon footprint on the farm is the way of the future, according to an increasing number of politicians, scientists and industry analysts, and the Australian organic industry says it is in a strong position to realize returns. Recent ABARE agricultural forecasts for the future of farming- based on traditional farm management suggest Australia is particularly exposed to the adverse effects of climate fluctuations.
Source: http://www.farmonline.com.au/farmmags/australianfarmjournal/article.aspx?articleid=5543
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