SOUTH East Australian farmers once again find themselves in a new financial year without an end in sight to the drought.
While good rain has boosted prospects for some farmers in parts of Victoria and southern NSW, the lack of rain and continuing fallout from the global financial crisis in the form of rock-bottom prices for some commodities is threatening the viability of others.
Of Australia's exportable farm commodities, wool was always going to be the most vulnerable to financial crisis and a volatile Australian dollar.
And yet shrinking supply has seen it hang on, with the Eastern Market Indicator outperforming the sharemarket in 2008-09.
However, Steven Read of ABB Wool Exports said he could not forecast any big rise in demand for superfine until the western economies recovered from the global crisis.
For grain growers, at this stage of the season what falls from the skies is just as important as what happens in grain marketers' boardrooms.
The crops have plenty of potential, but the success of the season will hinge on spring rain which has been severely lacking in recent years.
The prices are looking good for those who can manage a decent harvest.
AWB Ltd last week released its first pool estimate for the coming season, predicting a good return of between $310 and $320 per tonne.
For livestock producers, mud underfoot and the return of feedlot buyers have helped boost values for both young and grown cattle to their highest point in the past year.
From Wodonga to Mount Gambier, backgrounders and restockers fuelled by good early winter rain and mild conditions have helped push rates for light (250kg) spring-08 drop steers to more than 250c/kg in the past month.
As supply falls, feedlot buyers have lifted their rates, paying as much as 200c/kg at Warrnambool last week for steers heavier than 430kg.
The benchmark Eastern Young Cattle Indicator recovered from a slow start to 2009 to close at 335c/kg last week - its highest point for the year.
The dairy industry short-term outlook remains volatile following the price commodity price crash late last year.
Milk prices were cut by up to 40 per cent from February and many farmers are facing an unsustainable milk price this year.
Coupled with on-going drought, milk producers need help from the heavens and a reeling-in of costs.
For horticultural producers, water availability, the new horticulture award pay-rate and the effect of emissions trading will be three key issues this year.
Victorian Farmers Federation horticulture vice president Gaye Tripodi said the huge increase in labor costs stemming from the new award could "cripple" the industry.
