THE BUSH BOUNCES BACK, The Australian, 22 June, 2001.
THE BUSH BOUNCES BACK: [1 Edition]
Stapleton, John. The Australian [Canberra, A.C.T] 22 June 2001: 39.
Abstract
The ABARE report predicts a strong export performance, with total farm exports to rise 3.7 per cent to $29.8 billion next financial year following a 19 per cent rise this year. Export earnings are forecast to increase for wheat, barley, rice, beef and veal, live cattle, sugar and wine.
Strong demand for grains, especially in Asia, is forecast to lead to increased world prices, with returns to local growers assisted by theweak Australian dollar. The value of wheat exports is expected to increase by 6.6 per cent. The rundown of the infamous wool stockpile and a decline of stocks kept on farms is reflected in a 63 per cent fall in overall wool stocks; meaning that while wool prices are not predicted to rise next year the outlook for wool is far better than it has been for decades.
Chief agricultural analyst with ABARE Terry Sheales says the gross value of farm production is predicted to rise by just under 5 per cent to $34.9 billion next financial year. Despite delayed plantings due to early lack of rain across much of the NSW grain belt, total winter crop production is also forecast to increase marginally. An estimated 6 per cent increase in land planted to barley is driven in part by the delays, as barley can be successfully sown later than wheat and canola.
Full Text
For rural Australia, it's the most important forecast of all. The bush doesn't ride on the sheep's back, but a dream combination of favourable weather, good commodity prices, strong exports and a low dollar. John Stapleton reports.
THIS is a forecast that's been very long in coming: a strong financial performance from the farm sector.
The release this week of the Australian Bureau of Agriculture and Resource Economics (ABARE) commodity report shows a rural economy on the rebound to good times, with high levels of production, further improvements in price and improving on-farm incomes.
And if that good news isn't enough, there's also the latest national rural market report from Elders.
To be published next week, it confirms a rise in demand for rural properties across the nation because of the combination of good weather conditions and strong prices.
The report says high demand is clearly evident in auction rooms, where buyer demand is seeing good prices achieved, and now Elders is predicting a particularly bright spring selling season.
Real estate specialist for NSW and the ACT John Peden said good rainfall in mid-June had greatly eased pressure on farmers to establish winter cropping programs.
Previously dry weather had meant many farmers were falling significantly behind in their planting, creating serious concerns that good prices were not going to be matched by good weather.
"A large proportion of NSW has benefited from the welcome falls which, together with continued improvement in commodity markets, is set to provide strong returns to most sectors of the agricultural market this year," he said.
One of the prime properties for sale is the 2,613-hectare Allendale, which comprises three adjoining properties, each with its own housing and working facilities.
The well known Allendale Merino Stud is famous for its medium wool based on the Pooginook merino stud in the Riverina.
The property is in the Tomingley district between Parkes, Dubbo and Narromine and is expected to fetch at least $1.5 million.
The three properties, known as the Tomingley aggregation after the local village, feature three sets of houses and working facilities. Allendale has been owned by the Woods family for 84 years. Eric, 80, who has lived on the property all his life, and his wife, Patty, are well known in local government and political circles. Their daughter has business commitments elsewhere.
Dennis McGrath, rural property specialist in Dubbo, says Allendale is one of the larger holdings in the central west and its size means it could be broken up.
"Allendale has been very, very conservatively stocked and farmed for generations and as such is a particularly good buy," he said. "It will suit sheep, cattle or cropping, and is a good versatile property, which is what everyone wants now."
A full-time manager at Allendale who has been there for 20 years is willing to stay.
Primac Elders in Queensland reports continuing interest in wool properties and strong demand for cattle properties.
The company's head of rural property for Victoria and the Riverina, Ian Sunderman, said there were very positive indications that thecountry was finally starting to see the effect of recovering commodity prices on rural real estate values.
"Several properties that have been on the market for up to 18 months and regarded as too dear have been sold in the autumn," he said. "We expect this trend to continue with many long-term properties listed by agents at perceived unachievable values now expected to be saleable as the market catches up."
Mr Sunderman said clearance rates in the order of 85 per cent were up 20 per cent on the same time last year.
Reports from Western Australia are also positive across all sectors.
The ABARE report predicts a strong export performance, with total farm exports to rise 3.7 per cent to $29.8 billion next financial year following a 19 per cent rise this year. Export earnings are forecast to increase for wheat, barley, rice, beef and veal, live cattle, sugar and wine.
Export earnings were strong this financial year, with wool up 34 per cent, dairy products up 33, cotton 29, beef 23, wine 19 and wheat 15.
Net cash income on farms increased by 20.1 per cent this year and is predicted to rise another 12.1 per cent this year while net value of farm production increased by 34.3 per cent this financial year and predicted to rise a further 16 per cent next year.
The already buoyant Australian saleyard indicator price for beef is forecast to rise 6 per cent while the troubled sugar industry is expected to see a 15 per cent jump in production and an even higher increase in the value of exports.
Canola prices are expected to rise by 15 per cent and farm gate prices for milk are up 11 per cent.
Strong demand for grains, especially in Asia, is forecast to lead to increased world prices, with returns to local growers assisted by theweak Australian dollar. The value of wheat exports is expected to increase by 6.6 per cent. The rundown of the infamous wool stockpile and a decline of stocks kept on farms is reflected in a 63 per cent fall in overall wool stocks; meaning that while wool prices are not predicted to rise next year the outlook for wool is far better than it has been for decades.
This is an unprecedentedly positive picture for Australia's regions; more used to the batterings of harsh interest rates, unsympathetic banks, collapsing infrastructures, droughts, floods and dismal commodity prices.
For once the country has been blessed with not just good commodity prices but good weather.
National Farmers Federation deputy director Lyall Howard said a lot of essential capital investment was now going back into properties.
"There is a lot of catchup, a couple of good years doesn't suddenly make agriculture a hugely profitable industry," he said. "It is still high risk and you get bad years. Equipment has to be replaced, fencing, road repairs, conservation work all has to be done.
"Farmers will need this income to stay competitive. We still trade into a tough and corrupted international market. But with a competitive currency and good weather conditions contributing to an optimistic outlook, there is renewed confidence in the bush. It's about time!"
NSW Farmers policy adviser Mick Keogh said the substantially improved returns were already being reflected in improved property prices, particularly on the tablelands and slopes of eastern Australia.
"Investing in a rural property is looking much better than for a long while," he said. "A third of all the turnover in small towns comes from farm spending, so the flow- through will have a very quick effect in terms on languishing country towns."
Chief agricultural analyst with ABARE Terry Sheales says the gross value of farm production is predicted to rise by just under 5 per cent to $34.9 billion next financial year. Despite delayed plantings due to early lack of rain across much of the NSW grain belt, total winter crop production is also forecast to increase marginally. An estimated 6 per cent increase in land planted to barley is driven in part by the delays, as barley can be successfully sown later than wheat and canola.
Total meat production is also forecast to rise again next year, underpinned by strong export demand, the weak exchange rate and forecast high prices. There was an estimated 23 per cent rise in the saleyard indicator price of beef cattle this year, with prices expected to rise a further 6 per cent next year.
Reduced sheep meat supplies and strong demand are also expected to contribute to higher sheep and lamb prices.
While the low currency means machinery costs will stay high, there is expected to be some easing of fuel and fertiliser prices.
Dr Sheales said the excellent combination of market and seasonal circumstances in much of the rural sector didn't happen very often. "The crop's far from being in the bin yet, it's only just in the ground and we have a long way to go to harvest. But the signs are good, not just for grain but across the board. For those of us who've been around the rural scene for a long time, it's great to see such a significant turnaround in the fortunes of farmers."
Illustration
Caption: Mainstreet: Harden,NSW; Photo: Photo