By Kate MeehanRead moreThe government’s latest forecast for grain supply is “relatively optimistic”, with the number of tonnes the Australian grain industry needs to supply by mid-2019 still “considerable”, the Australian Government’s chief agricultural adviser Mark Parnell told the ABC.
“We still have an expectation that the world market will be oversupplied, but the fundamentals have changed,” he said.
The world market for Australian grain is “likely to be a bit below” its current level, Parnesons forecast.
The new forecast also puts the price of grain in the $US1.25-$1.35 range, while the $1.20-$1 in the last forecast was “fairly optimistic”.
“We think that the future is going to be much lower than what we thought,” he told the programme.
Parnell said Australia had become “a little bit complacent” about the future of the Australian wheat industry and was not expecting a boom in demand for the commodity.
“I think we are probably a little bit over the top,” he admitted.
The Australian Grain Industry Association said it welcomed the forecast and called on farmers to “move forward” with the plan.
“This is an important opportunity to provide the industry with the certainty it needs to take action and grow, particularly as demand for wheat grows,” association president, David Pryce, said.
“The market is changing rapidly and this gives us a very good opportunity to respond to the changes and be able to grow our business.”
The industry has been trying to shift to a more market-based approach since it was put under the reins of the Federal Government in July last year.
The government has been working to diversify its wheat portfolio and to diversified its supply.
It is now estimated the industry needs about 15 million tonnes of wheat, compared with around 14 million tonnes in the first quarter of this year.
In September, the government announced it was reducing the annual subsidy on Australian wheat, from $US50 million to $US35 million.
The Federal Government is also planning to cut wheat prices to about $US3.20 per bushel from $3.75 per bushell.
Topics:agricultural-farming,corn,agribusiness,australiaFirst posted November 17, 2019 07:55:47Contact Kate MeesmithMore stories from New South Wales