Issue 33
January 2001

Copyright
Prairie Grains Magazine
January 2001

Grain Farming in the Land Down Under

Drought, salinity, grasshoppers, stampeding kangaroos—welcome to grain farming in Australia.

Drought, salinity, grasshoppers, stampeding kangaroos—welcome to grain farming in Australia.

Grain is grown in all Australian states, but primarily in a narrow crescent running through the mainland states, known as the wheat belt or the wheat/sheep zone, an area that stretches in a curve from central Queensland, through New South Wales, Victoria and southern South Australia. Western Australia is the largest wheat producing state.

Although wheat is adaptable to a wide range of climatic conditions, much of Australia is either too wet or too dry for wheat production. As a result, the industry is limited to a relatively narrow strip that rarely extends more than 250 miles inland from the coast. Wheat is grown only in the drier parts of this strip, because in wetter areas other enterprises, like dairying and horticulture, have been more profitable. The major part of the Australian wheat belt lies within the areas that receive about 9 to 15 inches of rain between May and October.

There are about 121,000 farms in Australia, of which about 45,000 grow one or more types of grain, with about 25,000 farms that include wheat as one of the main grains produced.

Grain growing is essentially a family business, with around 90% of farms owned by either a sole proprietor or a family partnership. Few farmers employ more than one full time assistant, and contractors are often used on a seasonal basis. The average size of an Australian crop farm is about 3,800 acres, with cropland devoted to wheat averaging about 2,250 acres.

Brothers Ian (left) and David Linklater grow mostly white wheat on their 6,600-acre farm near Mildura, in New South Wales. The Linklaters, like other Australian producers, do not receive direct government subsidies like producers do in competing countries, such as the U.S.  Their competitive advantage is a close proximity to Pacific Rim markets, a single-desk for wheat exports in AWB Limited, and input costs—land and herbicides in particular—that are lower than in other grain-producing areas of the world.

Ian and David Linklater grow mostly white wheat (a winter variety with 120-day maturity) on their 6,600-acre farm near Mildura, in New South Wales. They use mostly a wheat-fallow rotation, although they also grow triticale and some barley, and will try lupins or faba beans next year, in part for the nitrogen boost the legumes will provide.

They usually plant wheat between late April and early June, and begin harvesting in November. Their average yield is about 28 bushels/acre. They fertilize wheat at a rate of 60 lbs/acre, and plant at a seeding rate of about 25-28 lbs/acre. They plant two varieties of wheat each year, and usually try a new variety “every couple years.”

Australian producer Ian Linklater with a handful of red-brown soil that is typical of farmland in New South Wales, South Australia, and Victoria. Most wheat belt soils require regular fertilization, and crop rotation with legumes helps provide organic matter and prevent crop diseases.

The Linklaters spray each growing season for broadleaf weed and wild oat control in their wheat. This year, grasshoppers could pose a problem. The last big outbreak was in 1984, they say, when a cloud of hoppers ate up pretty much everything in sight. The state government’s Plague Locust Commission tracks grasshopper numbers and sprays when they reach a certain concentration. The Linklaters are responsible for controlling hoppers and other pests in their own paddocks (fields), however. “It’s frustrating to be looking at a good crop, and have it threatened by them,” says Ian.

Rabbits used to be a major pest problem in their crops, but not anymore. A virus introduced by the government has brought the Australian rabbit population under control. With the Linklaters’ land bordering bush country, wild emus and kangaroos can cause crop damage by trampling. In fact, it’s common for farmers to periodically hire hunters to bring kangaroo numbers down, when they become a nuisance.

The Linklaters have been farming together since the late 1970s, when they started as sharecroppers. In 1992, they bought the land they farm now (which in many cases, amounts to a permanent lease on land that remains under government supervision) for about $40/acre U.S.  It was land that might be best described then as “scrub” ground, used for limited sheep grazing. David and Ian paid about $25-$30 U.S. to have it cleared for crop production. Now, it’s worth about $80 per acre. Renting cropland in their area would cost about $9 an acre.

They run two John Deere combines and two JD tractors, and were the first producers in their area to use Concord air seeders. They have two 60-footers, which allows them to seed about 50 acres per hour. They also run two sprayers and two trucks. They estimate the value of their equipment new would be close to $1 million U.S.

The Linklaters, like other Australian producers, admit that their competitive advantage is input costs—land and pesticide in particular—that is lower than in other grain-producing areas of the world. The cost of a wild oat herbicide is about $8 U.S. per acre—application included. A glyphosate burndown for weed control on fallow is about $5/acre U.S., again with the application cost included. “Our biggest enemy here is drought and world prices,” says Ian.

The Linklaters are supportive of the single-desk monopoly that AWB Limited has for Australian wheat exports, and its pooling method of paying growers for grain. “We’re not marketers, so you feel a bit safer (marketing through AWB Limited). This way we can put our best effort into growing a crop,” says Ian.

Forest Creek Station
Farms, particularly larger, more established operations, are often referred to as “stations” in Australia. Forest Creek Station, near Deniliquin in New South Wales, is the name of Robert Landale’s 5,500-acre farm. Landale, who has been farming for 20 years, is from a family that has long been involved in production agriculture. His dad, Hunter, runs Mundiwa Station, which comprises about 14,800 acres and has been owned by the Landale family since 1861. Hunter is active in local rural development efforts and produces grain and 5,000 sheep at Mundiwa.

About 4,000 acres of Robert’s Forest Creek Station is under cultivation. He grows rice, wheat, and canola, and irrigates most of his crop production. Each year for the last two years, Landale has been planting 40 acres of trees for eventual commercial production He used to raise sheep, but got out of the business five years ago. “It was a good decision. Rice doesn’t suit having livestock—the sheep knock down the irrigation banks. And there’s more profit in cropping than in sheep.”

Rice is his primary cash crop, with an average yield close to 150 bushels an acre, and a net profit of about $200 an acre. “About 80% of our profit comes from rice, which consists of only about 30% of our acreage,” he says. Landale plants rice in October, harvests it in April, drains the land, then plants wheat in May. He follows wheat with canola.

Landale sells about half of the wheat he produces to AWB Limited (he too believes that the advantages of a single-desk exporter outweigh the disadvantages), and sells the rest to companies allowed to bid on grain for use in the domestic market. He contracts just over half of his canola production with Cargill, and sells the rest in the open market.

He subscribes to several grain advisory services for marketing advice. By early September, 2000, Landale had already locked in a price on some of his wheat production for next year. He used December, 2001 wheat futures at the Chicago Board of Trade to lock in a minimum price of $160/ton for his white wheat, delivered. That works out to about $4.35/bushel Australian, or $2.60 U.S. He figures the average price he receives is usually around $2.20 U.S. Last year, the price he received for his wheat was just under $2.00 U.S.

Landale has two full-time employees for farm help. He owns a 900-bushel capacity semi truck for hauling grain, two tractors (220, 100 horsepower) and a no-till drill. He shares ownership in a John Deere combine with his dad, Hunter. His on-farm storage is limited mostly to seed saved for production the following year. “It’s better to take call options than deal with storage,” he says.

Rural life in Australia has its share of challenges, just as it does in the United States. Australian farmers look for ways to produce more profitably, and add value to what they produce. The average age of farmers is increasing, and the rural population is decreasing, with more people relocating to towns and cities that serve as regional centers, such as Deniliquin. Australia has a high suicide rate and it’s even higher among farmers, due in part to their individualistic nature, often finding it difficult to seek help. More counseling services are being offered to help Australian farmers cope with stress.

Landale himself has endured a divorce, but is happily remarried to his second wife, Diana. She works part time in Melbourne, about three hours away, and rents an apartment there while at work. Diana’s first husband also farmed, but now is out of farming, and in fact, has moved out of the country.

Both Landales say they enjoy their lives, farming in the Australian bush country. Still, Robert Landale is not sure what the future will hold for his Forest Creek Station. He says he would not encourage his children to farm. “You get sick of the unpredictability. It wears you down after awhile.”

Rice is the primary cash crop for Australian producer Robert Landale. Rice production in Australia is usually irrigated, and after fields are drained, wheat is often planted as a follow-up crop to take advantage of the left over soil moisture. Australia exports 85% of its annual rice production to about 70 countries, many of which are in Asia. Australia enjoys a natural freight advantage to expanding Pacific Rim markets, as its north coast lies only about 300 miles from the islands of south east Asia. Ricegrowers Co-operative Limited, of which Landale is a member, is the largest exporter of branded products in Australia, and the third largest rice company in the world. Company revenue goes back to rice producers/company shareholders. The company has a monopoly on Australian rice exports, much like the single-desk structure of Australian Wheat Board Limited. Officials for both companies say their single desk structure for exports helps them compete with other countries, including the United States, whose industries receive more government subsidies.

AWB Limited contributed wheat production information referenced in this article.