Beyond Agronomy News: February 19th, 2008

Agronomist Notes

Twynam Agricultural Group

I was kindly toured around two stations owned by Twynam Agricultural Group, the largest holder of land and water rights in Australia. In Australia alone, they own 15 farms totaling 990,000 acres and also hold 346,000 acres in Argentina. The Twynam Group is owned by one family and began in 1972 by a man named John Kahlbetzer and now includes his sons Johnny and Markus. The two farms I visited were called Gundaline and Cobran which consisted of 45,000 acres and 30,000 acres, respectively.

As you can imagine Twynam is one of the largest cotton, rice, wheat and pulse growers in Australia. Each property or station has a farm manager whose biggest task is to manage employees, contractors and grain movement. All farm operations are contracted to third parties, right down to the trucking to the end user. With the immense scale of these farms, plus two crops per year, you have a very busy farm manager. The list below gives you the scale of Twynam's annual production potential.

Wheat: 45,000 hectares producing over 100,000 tonnes

Pulse and Oilseeds: 5,000 hectares of pulses, 3,000 hectares of canola, 65,000 tonnes of cottonseed

Rice: 5,000 irrigated hectares producing 45,000 tonnes

Beef: 18,000 Angus and Hereford breeders within a total herd of 35,000 head

Wool: 55,000 Merino ewes, with a total flock of 170,000 sheep

Cotton: 25,000 hectares producing 200,000 bales

Feedlot: Licensed capacity of 18,000 head

As I mentioned earlier, the group has Australian and Argentine holdings and together they work on marketing, promotion and developing research with the best production methods and equipment for the different crops. A stable hedging program is used to cover the risks of monetary changes and product prices.

Here's a map of the Twynam properties in Australia: map

Point Farms - A Farm Tour with Mathew Stott

I had the opportunity to catch up with one of my fellow Nuffield Scholars Mathew Stott, who farms near Darlington Point, NSW. Mat, along with his father and brother, are pedigreed seed growers and have been for over thirty years. The three family members have separate farm names but farm collectively. Mat generously took some time out of his busy day to tour Vanessa and me around his operation, Point Farms.

Point Farms includes 4,500 acres of irrigated land that's supplied with deep well bores and surface irrigation water. The surface water is supplied by the Murrumbidgee Irrigation Area (MIA), which has been shut off for two years because of the drought. A typical summer/winter rotation would be as follows: year 1- sunflowers/wheat; year 2- sorghum/soft wheat; year 3- seed corn/canola; year 4- sorghum/wheat; year 5- sunflowers/wheat. However, the rotation may change if an opportunity arises such as high barley or faba beans prices. Most crops are grown under contract for a major seed company and the Stott family is their largest single grower.

The last two years have been difficult, but manageable for Point Farms during the drought. Fortunately, the majority of the farms water needs can be met with the deep well bores. Mathew had a chuckle when he told me he went to great expense to develop surface irrigation channels and infrastructure to secure water in the event his well bores went down. Well, after two years without any water allocation from the MIA, the expensive channels have laid empty.   

Most irrigation in this area is done by way of furrow irrigation where three foot wide beds are raised with a tillage implement. The crop is planted on top of the beds four to six rows wide and water is pumped down each furrow. I suspect the high level of evaporation in this area has ruled out the use of center pivots. My uncle showed me some irrigation recommendations where they allotted 14mm a day for a canola crop during flowering. In comparison, southern Alberta recommendations are around 7 to 8mm per day for canola during flowering.

The Stott's use the services of an agronomist about once or twice a week to help with field scouting and to help provide nutrient recommendations. A key part of their fertility program is poultry manure. They truck it in from 40 km away. The high fertilizer costs have made chicken or cow manure more attractive rather than the use of synthetic fertilizers. They spread 10 cubic metres to the hectare of manure before each summer crop as well as anhydrous ammonia at 180 units of N/ha and phosphorus at 100kg/ha as a starter. They also apply a phosphorus/ nitrogen mix with the seed at winter crop sowing time. This is generally at a rate of 150-200 kg/ha.

Average yields in the area are as follows, however this is largely dependent on irrigation timing and number of irrigations:

Wheat- 90 bu/ac
Barley- 150 bu/ac
Canola- 50 bu/ac
Corn- 175 bu/ac
Faba beans- 75 bu/ac
Seed sunflowers- 2 t/ha
Seed sorghum - 4 t/ha
Seed corn - 2 t/ha

One of the most interesting crop production practices Mat employs is the use of a helicopter during sorghum pollination. There are wide rows of female plants and intermittently a male row is planted for pollination (afterwards the male plants are mowed down and the female plants are left to mature for harvest). As usual, timing is critical. During pollination, which is roughly 4 to 10 days long, Matt checks daily to find the exact time the male plants are flowering and the female plants are receptive. They call in the helicopter to fly low over the crop to aid the spread of pollen. In canola they use bees, but with sorghum they use helicopters. Now that's my kind of farming!

The future plans of Point Farms are to continue expanding their land base as they have by five-fold since 1999. They would like to become more water efficient through the use of sub surface drip irrigation and to begin the value adding process to the other areas of the farm business. From the outside looking in, it looks like Mathew Stott and Point Farms have a successful business established and a strong desire to succeed in the future.

NSW Trucking Rates: $ per Tonne

Here is a list of New South Wales trucking costs to compare to our rates (prices in AUS dollars):

  0-10 km: $6.30
11-20 km: $10.00
21-30 km: $11.00
31-40 km: $12.00
41-50 km: $13.00
51-60 km: $14.00
61-70 km: $15.00
201-210 km: $29.00

Industry Organizations

I've included a list of industry organizations and research information on Australian crop production below:

Australian Wheat Board AWB: www.awb.com.au

GrainCorp: www.graincorp.com.au

ABB Grain Ltd.: www.abb.com.au

Canola Association of Australia Inc.: www.canolaaustralia.com & www.australianoilseeds.com

Grain Growers Association: www.graingrowers.com.au

Pulse Australia: www.pulseaus.com.au

The Status on Oz Variable Rate Technology

The use of guidance systems and auto steer is quickly becoming the norm in Australia. The use of variable rate technology is on the cusp as well. The ongoing drought has put things into a survival mode in many parts of Australia, especially around Leeton, NSW. While the rest of the world is adopting new technology, farmers here have had to sit on their hands and wait for cash flow to grow positive again. At this point, they're still not there yet. Optimism is growing with the unseasonal cool and wet weather the last two months. However, harvest doesn't start until October-December. That's a long ways off before the next paycheck and the first paycheck in two years at that! No government bailouts here, only low interest loans.

Rice researchers have been providing satellite NDVI imagery, the same type of imagery I've been using, to rice growers in the area. They have provided field zone maps to farmers for free at this point. A map with four to six zones in each field is developed and the farmer is then expected to hire an agronomist to soil sample the zones and develop fertility recommendations. Rice fields are fertilized with urea through broadcast aerial applications. Airplanes in the area are now set up with GPS guidance and variable rate fertilizer applicators. Floating fertilizer on by ground is not an option given the two feet of water standing in the field.

There are many variable rate projects in the waiting right now. You can imagine with zero water allocation, producers have been left with fields of weeds and not rice. When the irrigation comes back, the research projects will resume. A story that is not uncommon in any area of this business. You can imagine the farmers, crop input retailers, grain buyers, food processors and every small business that serves this agricultural community is waiting for the irrigation to return. Until then variable rate technology will sit and wait.

Snake Oil Sold Around the World

I had an interesting talk with a farmer who grew chardonnay, cabernet sauvignon, shiraz and zinfandel grapes along with citrus, cereal and oilseed crops. Obviously a very diverse cropping system and he seemed eager to try new ideas and products. He employed an agronomist who sold natural fertilizers and amendments on the side and not more than two minutes into the conversation I was being told about the benefits of applying humic acid. He went on to tell me that in soils with 1% organic matter the humic acid is like adding liquid organic matter to the plants and they respond. His confirmation of its success was the old "that field did better than the next so the humic acid must be working". He didn't have any yield data to back up his claim, only anecdotal information.

Funny, I've found myself in the same conversation on our side of the pond. Who knows, perhaps it does work in soils that have 1% organic matter. From my view, I think the humic acid provides an excuse for this Aussie tillage junkie to keep on using and sell some product out of the shed at the same time. I mentioned that the rates they are applying would add about one millimetre of product for every three square metres, so it must be pretty potent stuff to work as well as he thought. He paused, paused again and then moved on to how we manage saline soils. Too funny!

Market News

Wheat Prices in Australia
Grain prices are likely to fall away from the record highs seen this season, but remain well above what farmers are used to. Australian Crop Forecasters said the price for Australian wheat was likely to remain above $250/tonne. The world market for grains is at an all-time record high but it may be that prices being offered at the moment are unsustainable. Every farmer in the world can see how good prices are, and will be planting more grain this year. While greater grain stocks were likely this year, demand should keep prices high. With low stocks worldwide and the ethanol push, grains would remain in strong demand. A new price range will be set, from the $200/tonne to $250/tonne in the past, to between $250 to $300/tonne.

Full story

Local Grain Prices Across Australia

The link below provides a list of commodity prices based on locations across the states of New South Wales, Victoria, South Australia and Western Australia. The list includes everything from wheat, barley and canola to fababeans and chickpeas. I've also included a link to Alberta grain prices to help you compare.

Australia grain prices

Alberta grain prices

Annual Rate of Return on Agricultural Land in Australia

Owning farmland in Australia proves to be more profitable than actually farming it says one study. The average annual rate of return on farmland has been 5.8% since 1980, and just over 12% since 1999. The large increases in land values recently have come from top end cultivated land and high rainfall grazing areas. We've seen similar increases in land values across Western Canada where the black soil zones often fetch a much higher price than the dark brown and brown soil zones.

The average value of farmland in Australia has gone from $250 per acre in 1980 to over $1,100 per acre in 2007. Sound familiar? Farmland in higher rainfall areas of the Northern Territory have appreciated over 25% since 1999. The Aussie study suggests the water shortage has caused farmers to place a higher value on land located in higher rainfall areas as they seek water security. I think the study neglected to realize the simple rate of return achieved in higher rainfall areas compared to that in drier areas. For example, a 1,500 acre farm requires one air drill and one combine whether the farm resides in Olds or Oyen, Alberta. The only difference you'll find between the two areas is the date the machinery was made. SL

Source: The Stock and Land 

Australia Canola Production

Australia usually produces between 2 to 3 million tonnes of oilseed crops each year. This has been as high as 3.7 million tonnes in 1999-00, largely because of a record canola production of over 2.5 million tonnes. Canola and cottonseed are the major oilseed crops accounting for 93% of total oilseed production, with soybeans and sunflower comprising a further 3 and 4% respectively. Canola production is now the largest oilseed crop representing 57% of Australian oilseed production over the past 5 years, while cottonseed comprised 36%.

Source: canolaaustralia.com