WHILE growers across South Australia start looking towards plans for the 2010-11 cropping season, good fallow rains were welcomed in parts of the Mallee over the last month.
Grain and fertilizer prices, however, have not been received with such open arms.
With gross margins already looking pretty dismal, DAP and MAP prices jumping $150 per tonne and wheat prices coming back further over the past week, there is little to raise excitement over the coming season.
Growers in the Mallee who continue to feel the pinch from recent years will be likely forced to skip on the fertilizer altogether while cash flow is still limited and grain continues to sit in warehouse.
This immediate cashflow pressure has seen some growers begin to quit unsold grain as markets continue to slip and storage and handling charges rise.
As wheat prices have slipped over $10 in the last month if grain is to be held in the system until June, growers will require a price rise of over $30 to break even with harvest sold grain.
While there continues to be little activity in the barley market potential sellers wanting to offload remaining tonnes have been met with little buyer interest.
There continues to be difficulty in finding homes with no one wanting to take ownership domestically or internationally.
What does this suggest for South Australian crops?
Even in an area such as Eyre Peninsula, where the past harvest has been one of their best seasons to date, if prices continue to stay where they are and they experience only an average season this year, then many believe they will be trouble.
Many may look to turn some of these hectares to pasture especially where livestock numbers have been retained through previous years.
One thing is for certain across all regions of South Australia, that managing input costs will be a priority when looking at gross margins and as these currently stand, one would expect barley hectares to be effected more than the other commodities.
New crop prices appear to be hovering around the $405 mark for canola and $210 for Wheat which is right on historical averages, and although barley is $15 above current prices at a $145, this is still well off the $160 average.
So while prices continue on average to be consistent the cost of production has increased, meaning the old thought of working harder for bigger yields and bigger profits must now be replaced by growers working smarter, not necessarily harder.
