Here we are at the start of a bright new 2014. Some Western Australian grain growers had a good harvest in 2013, but some still have plenty of debt and some have left the industry. It seems we are experiencing another period of adverse terms of trade as the economists would put it, or at cost-price squeeze as most of us understand it. But this situation has existed in one form or another since the 1980s and the industry has adjusted greatly to stay viable.

Let’s look at a little history. In the late 80s and early 90s the state average wheat yield virtually doubled from just under 1t/ha to just under 2t/ha. So how did that happen? Well, the cost-price squeeze was instrumental in focusing the minds of farmers mightily. They knew that something had to be done and furthermore they knew what. All the relevant findings were known, either through local research or through hard-won experience and observation.

The average date of sowing was advanced by about 3 weeks aided by the availability of the appropriate chemicals, semi-dwarf varieties and reduced or zero tillage among other things. At the same time the percentage of the crop that received a premium for quality (Hard, Noodle, Soft, APW) was increased from about 15% to over 50%. Continue reading “COSTS UP – PRICES NERVOUS – TIME FOR CHANGE?”