Budgets tight across Wheatbelt

Most farmers in the central and eastern Wheatbelt are still recovering financially from the drought years.

AgVise management consultant David Mighall said growers in far eastern parts of the Wheatbelt suffered last season.

"The areas east of Merredin towards Southern Cross and Yilgarn were difficult - they had another below-average year," he said.

Mr Mighall said most grain growers in the region had quality issues at harvest, after rain caused an increase in falling numbers.

"People who were below average because of the low grain prices and quality issues had a break-even or deficit result for the year," he said.

Mr Mighall said farmers around Quairading, Cunderdin and Tammin had positive financial results last year after a few poor seasons.

"Where there were positive results last year, it was still nowhere enough to make up for the negative year of 2010," he said.

"Generally speaking, businesses are going in carrying high debt levels and the budgets are break-even at best. Some are better than others, but with higher input costs and outlook for lower commodity prices, budgets are fairly tight."

Mr Mighall said banks had a cautious approach to lending for the upcoming growing season.

"Because of the high level of gearing now, there will always be some businesses that are at their limit with finance," he said. "Banks are a lot more cautious than they have been."

He said canola was likely to be a popular crop going into this season.

"There is going to be a lot more canola planted," he said.

He said sheep had paid off for mixed farmers last year and many growers were looking to their sheep enterprise to help minimise risk.

"The sheep industry for mixed farmers is very positive, so that balances off," he said.

Merredin farmer Rodney 'Mark' Crees said he was fairly comfortable with his finances this year.

"We have still got grain on hand and we are in a comfort zone at the moment," he said.

Mr Crees said he was progressing towards recovering from the drought years but the low grain prices were not helping.

"If the prices were up a bit more we would be in a much more solid position," he said. "Prices are letting us down at the moment and that's not helping the bottom line."

Mr Crees said he did not make any major purchases this season and was sticking to a tight budget.

"We are not going overboard or doing anything stupid," he said.

He said his sheep enterprise helped to boost his income last season. "We sold about 1400 Merinos last year at good prices, which helped," he said.

Mr Crees said he was generally positive about the season ahead.