Mid West growers cautious despite record season

Claire TyrrellCountryman

Mid West growers are looking for another record season in 2012 to consolidate last year's high profits and justify purchases going into this season.

Geraldton Planfarm consultant Cameron Weeks said growers in the region achieved outstanding profits last year, but margins this year could be tighter.

"I've done about 50 budgets so far and haven't come across anything approaching a loss," he said.

"If we compare it to 2008, which was the most profitable year for us up here, farmers' profits are about two-thirds of what they were then."

Mr Weeks said areas around Mingenew and further north stood out in 2011.

"The standout areas were Binnu, through to Yuna, Mullewa and Morawa, where they all had significant summer rain and above-average growing season rain," he said.

"There were also some exceptional results around Carnamah all the way down to Moora where they didn't get the summer rain but had a beautiful winter."

More than 3.5 million tonnes of grain were produced across the Geraldton zone in the 2011-12 harvest, smashing the 2003-04 record of 2.6 million tonnes.

Mr Weeks said the sheer amount of grain meant farmers invested heavily in inputs and freight costs.

"From a profit point of view, 2011 has been an expensive year," he said.

"Nearly everybody was above budget on fertiliser, chemicals and freight."

Wheat prices slumped last year from close to $300 a tonne at the start of the season to about $240/t at harvest.

Mr Weeks said most of his clients made about $250/t on their wheat by forward-selling early in the season, which generated good profits.

Current grain prices are sitting at about $220/t, which Mr Weeks said had farmers on edge. "At these grain prices, the average business needs above-average yields to make a profit," he said.

"The budgets are reasonably sobering - the really good story was the result last year."

Mr Weeks said many growers were investing in new machinery for the 2012 growing season, after a few successive good years.

He said input costs would also be high this year, because the big crop in 2011 drew nutrients out of the soils.

Mullewa farmer Dave Tropiano said he was in a relatively strong financial position but he could not afford wheat prices to drop any lower.

"We are going to have to get a higher yield than what we normally would to make a profit this year," he said.

"It should work out okay with average grain prices, but grain prices should not get any lower."

Mr Tropiano said 2011 was an exceptional year for him, with wheat yields at almost double his long-term average.

However, he said he was cautious about making big investments, because he was no stranger to drought years.

"It could just as likely be a drought for us as a good year, so it is good to have some money put away for the bad years," he said.

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