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Grain, wool to offset big dry in Vic
22 Oct 2002
A Victorian Government report says the state's milk production will fall this year and prospects for horticulture are mixed. But rising prices for wool and grain will offset some of the effects of the drought.
Milk output is likely to fall below 2001-2002's record of 7.4 billion litres due to lower global prices, higher supplementary feed costs due to the drought and decreased irrigation water allocations, the report states.
In the horticulture sector, the outlook is uncertain as markets begin to be affected by decisions made about plantings and replacements crops several years ago. Citrus growers should see price increases for the first time after 10 years of low prices, but in comparison, red wine supply is likely to exceed demand and will lead to price falls of about 25 per cent for most varieties.
Victoria's Winter crop is expected to fall by 38 per cent over 2002-2003, with the outlook for the Wimmera and Mallee reasonably poor.
However, grain prices are rising, in contrast to production. This not only applies to drought-affected Australia but to other major exporting countries such as the US, where crop prospects have also been downgraded.
The report says livestock prices are hard to predict. Prices were low at many late Winter-early Spring sheep sales due to high yardings and little demand from those wanting to restock. However, prices have recovered substantially recently, possibly because many producers have already sold their most marginal stock and some rain has fallen. Animals coming onto the market now will be in demand from producers who see a shortage for restocking once seasonal conditions improve.
Similarly, wool prices are surging, caused by competition from farmers restocking and low supply at sales.
The Age, 22/10/02, page B2.
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