If anything serious happens in world affairs, like a little war, which interrupts for a couple of weeks the flow of fuel tankers reaching Australia, life as we know it will very quickly grind to a halt. Australia has less than 30 days supply of fuel and oil in the country. Farmers will unable to sow or harvest their crops. They will be unable to get their produce to market whether it be grain, livestock or fresh food. It is said that everything at some time in its life is moved by truck. Take a long look at Fig 3 below and calculate how long you can manage without your medicines at home and in the hospital and how long you can manage for food if there isn’t any in the supermarket. The freight trains will stop. The power stations that rely on coal will have to dig into their reserves and then what? No fuel for the coal trains. There is just three days supply of petrol in the petrol stations. When that runs out how do the kids get to school and how do the majority get to work?
A global cartel has manufactured a gas crisis in Australia, when in fact there is a world wide glut. On the 14th of April Professor West predicted (and it happened) that the Prime Minister would be prevailed upon by the cartel to stay away from doing for Australia what the Carpenter Government did for Western Australia when it secured for WA 15% of the Pluto gas field production for WA. The cartel will plead with the Turnbull government not to interfere with ‘the market’ and encourage it to persuade State governments to issue licences to explore the Australian landscape for coal seam gas (CSG) so as to avoid an impending gas shortage. Put ‘there is no gas shortage’ into you search engine and you will find that the lies of the cartel prevail.
According to Prof West there is no such thing as a ‘gas market’. Six big companies have formed a cartel and control the market price: Santos, Exxon, BHP, Origin, Arrow Energy and Shell. Michael West claims ‘Markets have visible prices and quantities on the bid and offer. The cartel even hides information about its gas reserves from government.’
‘When you’ve got them by the balls their hearts and minds will follow.’
Why do we put up with governments who do nothing for our national security?
It is Friday March 3 2017 at 08.00 hrs. On ABC AM this morning at about 10minutes 29 seconds into the programme, Andrew Davies from the Australian Strategic Policy Institute, announced we only have about three weeks supply of petrol in store in Australia — three weeks!! (search in the archive for the AM programme of March 3, otherwise you will get today’s programme) He raises the possibility of any tension between America and China could close off the sea route through the South China Sea and so cut of our supply of fuel from Singapore, on whom we are almost totally reliant. The story gets worse because it is not a new problem, there is a story in The Conversation from 2013 which forecast an impending fuel supply crisis unless the government of the day took strong action. It didn’t happen. The point needs to be made made it wouldn’t need a full blown war to disrupt fuel supplies, just a disagreement between the world super powers and the shipping routes that service Australia could close and we would run out of not only fuel but everything we import by sea.
In this issue I republish the simple truth from a leader in Australian grain marketing, Mr Palmquist from GrainCorp. He confronts us with the unpleasant reality that an antiquated infrastructure is being paid for by grain growers and I suppose by definition he is saying the only ones paying, are the growers. An expensive infrastructure, together with the poorest world wheat prices for more than a decade are wrecking the budgets of Australian wheat producers. This grain trader says he has no option but to pass the costs on to the grower — he would say that wouldn’t he? He only has to answer to shareholders — growers only have to answer to the bank. As an example he claims it’s cheaper to move grain from Ukraine to Indonesia than it is to move it 350 kilometers from Swan Hill to Geelong.
We live in a fantasy world, a world of illusion. The great task in life is to find reality.
Dame Iris Murdoch 1919 – 1999.
Stranger than fiction.
The post harvest stories, some of them as close to fiction as one can get without the author claiming to be a novelist, have recently appeared in both the national and the agricultural media. Minister Joyce is on the front foot; that is when it isn’t in his mouth, determined to persuade the Australian electorate, through a compliant media, that all is well in Australian agriculture and that the emerging Right in politics in Australia (Hanson) and around the world (Trump and Brexit), has nothing to offer to those who live outside the ever increasing majesty and grandeur of the State capital cities of Australia.
I have used the words ‘majesty and grandeur’ quite deliberately. Around Australia billion of dollars has been spent on State capital cities, much of that money is for the enjoyment and the pleasure of those who live in those cities. As we shall see, as billions has been spent on shoring up the city vote with new sports stadiums and the like, the infrastructure vital to agriculture has been allowed to deteriorate and in some cases decay to the extent that we are no longer world competitive — we can no longer, at times, but ever increasingly, compete for markets around the world.
The Nationals heartland is in rural Australia, it’s the country folk who get them into parliament. In WA they did a deal with the Liberal Party, which put the Liberals into government and some National members into key positions in the WA Government. Again, and have we seen it too often, a minority determining government policy? The Nationals are now worried that Hanson, the Hunters Shooters and Fishers Party and maybe others will replace them in Parliaments around the country and in so doing, replace them in holding the balance of power.
Minister Joyce wants everyone in the country to believe that record high prices for livestock and an ever-increasing demand for wool are the beginning, as one journalist put it, of a ‘golden era’ for the farmers of Australia. Coupled with what some are calling a record harvest, what could possibly go wrong for Minister Joyce and the wheat farmers of Australia? Well this for starters. Continue reading “Is the Australian wheat industry finished?”
The World Wheat Market – Where is it going and where are we going with it?
The recent comments reported to be made by Greg Harvey, Interflour’s Australian born Chief Executive, that Australian wheat is too expensive for the markets in Indonesia and Singapore defies belief. If we cannot be competitive in the big and expanding markets on our doorstep, with wheat at the price it is at present, where will that leave Australian grain merchants selling into markets around the world? What price for growers at the next harvest?
The move into Interflour was strategic for Cooperative Bulk handling making vertical integration a reality for Australian wheat growers. Recent announcements have reported Interflour expanding into Vietnam. Cooperative Bulk Handling the West Australian grain handling and marketing cooperative owns 50% of Interflour. Interflour, which now owns nine flour mills across Vietnam, Indonesia, Malaysia and Turkey is, one would think, integral to the prosperity of WA wheat production, if it is to meet the challenges of market expansion in the region in which Interflour operate.
This story fits in quite nicely with another story. A few years ago I was talking to a lady whose family had decided to build a new biscuit factory in Indonesia rather than Perth and then export their biscuits into Australia and around the world. I found their biscuits and good they were too, on the shelves of Woolworths. Out of curiosity and because of what was on their label I phoned their Perth office. The lady was quite open in claiming that it was cheaper ‘for them’ to build a new factory and manufacture in Indonesia than in Perth. She claimed their factory was as clean as any Australian hospital and having a base in Indonesia it opened up the world wide Halal biscuit market to them.
I said I hoped they always used Australian wheat. Her answer was something like ,’We do when we can, at the moment we are using British wheat. Sometimes we can’t get Australian wheat.’ I never thought to ask if that was because of price — It never entered my head. If Australian wheat remains too expensive — just look at the markets below.
“This is not the end, this is not even the beginning of the end, this is just perhaps the end of the beginning.”
The first three parts of this series ‘National Bank Bastardry’, dealt with the simple fact that the NAB seized over $9 million worth of the Cronin family assets to settle a debt to the NAB of just over $5 million. The Cronin’s assets were six farms (Chambejo Farms), including the family home. When the NAB seized the Cronin’s land they (the Cronins) had four farms on the market with Landmark. The seizure was unnecessary and according to every reference I can find, probably illegal. The law is unequivocal, the mortgagee can only seize asset(s) to the value of the mortgagors debt to the mortgagee, and the family home should only be seized as the last resort. The NAB ignored that ruling and seized six farms including the family home worth, according to the only FH valuation we have been allowed to see, some ~$8.5 million— an independent valuation $9.4 million both valuations well in excess of the debt. That didn’t stop the NAB — they seized the lot. There was a now famous court case Nolan v MBF Investments. It’s not unreasonable to assume that banks and receiver managers know of the judge’s determination in this landmark case. This reference also explains in detail what is meant by ‘duty of care’ as it applies to property sales. I have quoted this ruling many times in previous articles and neither the NAB or Ferrier Hodgson have replied.