VIC Market Update – 13/09/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

Warming days, cool mornings, rising markets, hay cutting closer to the border and a healthy amount of water usage from big plants. In short, there has been a lot happening this week.

On Wednesday, I spent the day at the Birchip Cropping Group cropping trials and it was a perfect day. This season has been one of the best that the Birchip areas has had in years – so good in fact that it’s made it hard to pick the differences between varieties, row spacing changes and other induced variations at the trial site! In my opinion, one of the key talks on the day was by Dale Boyd from Agriculture Victoria, about Ag Vic’s 16 weather stations. The audience asked how long moisture would last at depth without follow up rain. Situations vary obviously, but historically some probes have shown measured moisture reductions of up to 50% in the space of a month. Depending on your % moisture starting point, this made for an interesting discussion about holding for grain or cutting for hay. If you want to do some further reading on this, I have included a link below to Ag Vic’s soil moisture monitoring webpage.

Following on from moisture concerns, markets continued to rally again this week, but sellers are scarce! In two weeks, old and new season cereal prices have increased some $10-$20/mt on primarily weather driven theories. However, growers are holding off. Why? There are a few reasons; big crops require water but not all areas have a lot of moisture reserve, hay prices are a definite $/ha contender (vs grain), and we’re only just getting into Canola flowering, and legume podding is still to come, so there is definitely still a frost risk there for those crops. And, for those growers who are pretty comfortable, a tight rainfall outlook could continue to push price along in the right direction, so why lock in now?

Pictured: Wheat and Barley plots at the BCG trial site.

 

Prices as at 12th September

* View of current market pricing. Does not represent current Agfarm bids.

 

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VIC Market Update – 06/09/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

There was a lot happening this week in Victoria. We’ve had some nice growing weather at around 20 degrees, canola hay cutting has commenced along the VIC/NSW border with more likely dependant on the patchy rainfall forecasted for today/tomorrow and grain markets have rallied.

This week Agfarm have been travelling from Adelaide through to Boort Victoria catching up with private silo operators. Happy to report that from Horsham to Boort via St Arnaud and Charlton everything looked very good. I’m told from the SA border to Horsham was likewise good. It is a bit tighter from Boort through to Bendigo. This was also where we saw more rust in cereals.

Both old and new markets reacted strongly to the warmer weather and talks of hay cutting. The growers I spoke with who had cut canola around Berrigan and Mathoura cut because they had the bulk but were concerned with lack of subsoil moisture. This sentiment continues through to Echuca and Swan Hill, but it’s a little early there yet. Our team also drove through Mildura and the northern SA Mallee. Without significant rainfall, it looks like this area will struggle to get much of a return.

All this talk was reflected in increased buyer enquiry, however selling has been limited while rainfall stays patchy and pricing firms.

Pictured: Canola near Bendigo

 
 
 
 
 
 
 

Prices as at 06th September

* View of current market pricing. Does not represent current Agfarm bids.

 

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Dairy Input Finance

Dairy Input Finance

5 minute read

The dairy industry has seen significant change and experienced some extreme challenges over the past few years. These changes and challenges have put pressure on cashflow and financing options for many dairy farmers. So, with summer fodder and hay season fast approaching, this month we’re going to focus on finance and cashflow options available to dairy farmers to make feeding your herd a little easier.

Like other types of farming, there are a number of financing options to choose from depending on your own circumstances. Let’s start with the most common.

Bank Finance

Like all types of agribusiness, the most common source of finance for dairy farmers is their bank. Generally speaking, support comes in two forms; term debt and overdraft. Term debt is most commonly used for land purchases or other long-term capital requirements. It is repaid over a number of years with principal and interest repayments usually made monthly or quarterly in line with milk payments. Overdrafts are fluctuating cashflow facilities used for working capital required to manage daily business requirements. Most dairy farmers would utilise both these forms of finance.

What are the alternatives?

For a bit of background, due to dairy farmers having the security of a monthly milk payment, milk processors and other dairy specific businesses have historically offered their producers access to finance. The reasons for this vary but the key ones include; ensuring milk supply through a financial obligation, helping producers grow their operations or assist producers to manage cashflow through tougher times. From the milk producers perspective, reasons for seeking alternative finance may include; the cost of finance, convenience, flexibility in milk processor, access to greater capital (than their bank may allow), access to unique capital, such as cows, and sometimes, lower barriers to entry.

Capital finance/growth incentives

This is where the milk processor supports a producer to increase their herd size or upgrade their operation. In turn, the producer agrees to supply the additional milk to the processor. Generally, these arrangements will be backed with a contract and require credit approval. These arrangements can also be supported by the producer leveraging shares or equity in the processor.

Cashflow smoothing

As with other types of farming, cashflow fluctuates with the season. In winter, milk supply is low and milk prices are higher. The inverse is in spring; milk supply is plentiful but prices are lower. Some processors can assist producers by smoothing their milk payments over the year, providing equal installments for ease of budgeting and cashflow management.

Advance payments

Advance payments are an arrangement where a processor offers cash payments in advance of supply to allow the producer to purchase production necessities (feed, machinery repairs etc) which exceed their monthly excess cashflow. Advance payments are recouped by the processor later in the year.

Herd (re)building finance

This is where a third party business assists producers to increase or establish their herds by purchasing (financing) cows on the producer’s behalf. This frees up cashflow now and allows the farmer to gradually repay the cost of rebuilding their herd while generating an income from the milk production.

Crop input finance – Agfarm Accelerate

Over the past 12 months, Agfarm has expanded its input finance program, Agfarm Accelerate, into the dairy industry. Agfarm Accelerate is a competitively priced line of credit for milk producers to purchase their winter and summer cropping inputs (seed, fertiliser, chemical, fuel), including feed supplements, grain, hay and fodder. Agfarm pay suppliers direct on behalf of the milk producer which ensures payment terms can be met and increases cashflow availability throughout the season. All credit facilities are repaid to Agfarm directly from the milk processor and you can choose any milk processor you wish to use. Accelerate is used in conjunction with other financial facilities, allowing producers to capitalise on opportunities when they arise. Finance terms run for a maximum of 11 months.

For more information on Agfarm Accelerate and how it can assist you to manage cashflow this season, reach out to your Regional Manager on the details below.

Reid Seaby
WA Regional Manager – 0439 625 853

Kate Phillips
SA Regional Manager – 0438 128 472

Anthony Hall
QLD & NSW Regional Manager – 0400 873 777

James Ryssenbeek
VIC Regional Manager – 0447 743 556

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VIC Market Update – 30/08/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

There have been no material rainfalls this week, but we’ve seen some welcome sunshine and a bit of frost about. This is good for spraying fungicides, growth and drying out the Western District, but creates concern for north west Vic and areas along the NSW/Vic border that need rainfall.

I attended a dairy meeting in Cohuna this week. There were a range of attendees from bankers, accountants, feed suppliers and producers. It was a very open meeting with lots of constructive discussions. The key take aways from the meeting was a focus on water efficiency, the need for longer planning horizons, retaining staff and herd reductions – all while maintaining profitability. It is very impressive how the industry is balancing fixed inputs of intensive farming with increasing water costs, reduced allocations and high input costs.

Dry weather and big plants are accelerating hay talks. Dairy producers are already in discussions with cereal hay growers to start replenishing reserves, but physical hay sales are stalled for now. With new season hay available in six to eight weeks, buyers are waiting to see how much new crop is cut before signing up.

New season markets remain stable to slightly firmer as weather dictates the next move. Old crop numbers continue to soften as we get close to new season grain with barley taking most of the hit.

Pictured: Cereals north east of Pyramid Hill.

 
 
 
 
 
 
 

Prices as at 30th August

* View of current market pricing. Does not represent current Agfarm bids.

 

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VIC Market Update – 16/08/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

There was good rainfall over the weekend for a lot of the state, a result of the snowy cold front. There are further light showers forecasted for the coming days. It is getting a bit too wet in the western districts now and some barely is yellowing off following 40-70mm through the area.

I spent this week between the Echuca and Swan Hill areas. Crops are looking very healthy throughout which is great, but the area will need rain to finish well. There is a lot of planet barley through this area and quite a bit has been grazed but is still looking very strong. Interestingly, I was told yesterday by an agronomist there are flag leaves appearing in some barley crops around Deniliquin. So, there could be an early harvest and it could also increase risk of frost damage with early maturity.

Old crop markets remain stable in Victoria with most sales enquiry coming from those clearing out silos. New crop has bounced around a bit this week following the USDA crop posturing. We are starting to see growers take some early cereal positions capitalising on current numbers. The same goes for both export and domestic hay sales. With the latest BOM update suggesting more average rainfalls into September, optimism should stay high for a good finish.

Pictured: Cobra wheat Strathallan

Prices as at 16th August

* View of current market pricing. Does not represent current Agfarm bids.

 
 

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VIC Market Update – 09/08/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

There have been patchy rainfalls over the last 24 hours with a lot of cold wind. Birchip has had some great falls again at 17mm, which is really starting to set things up for a good season now. Hopefully there is more to come over the coming days.

I spent this week up in the north west of Victoria. There is still plenty of opportunity from Ouyen through to Swan Hill and north, but perhaps not quite the subsoil moisture support of their slightly southern compatriots. I saw good crops from Swan Hill through Chinkapook and then onto Ouyen. Crop condition starts to fall away once you get closer to and then north of Carwarp. We saw several clients west of Carwarp this week. All their crops are up, there aren’t obvious signs of stress, but rain is required sooner rather than later. It was blowing a gale there yesterday (Thursday) afternoon which wasn’t helpful!

Grain markets remain stable. We’re seeing increased onfarm grain offers from growers looking to free up storage in preparation for harvest. There is still only limited forward sales from those I have spoken with, however following last night’s rainfalls, some areas will be getting comfortable of good yields for cereal crops.

In other markets, new season milk contracts are being signed and prices are setting new personal bests for many, alas much of the benefit will be absorbed by water and feed costs. The dairy industry is starting to work through their fodder requirements to replace emergency stocks and normal requirements from broadacre croppers – a normal process, but thankfully there is a lot of crop to choose from compared with last year.

Pictured: plenty of dust rolling through south of Merrinee in Victoria.

Prices as at 9th August

* View of current market pricing. Does not represent current Agfarm bids.

 
 

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VIC Market Update – 02/08/2019

James Ryssenbeek, Regional Manager VIC

1.5 minute read

More rainfall, more urea and more money required are the common themes this week. There were good rainfalls earlier in the week along the VIC/NSW border from Robinvale through southern NSW, Deniliquin through to Albury then south into northern Victoria. Swan Hill picked up a needed 15-25mm as did Echuca. Unfortunately, the north west corner has again missed out.

For the Mallee, many are telling me they’re done now in their barley and canola crops, baring spray, and as a general comment everything looks very good. Being a drier week down south, it’s expected sowing rigs will be getting close to finishing up the missed parts with a short season spring barley.

Markets this week have been fairly stagnant with buyers and sellers watching the new crop with little interest in old crop for now. New crop rises from last week haven’t held this week. Conditions at this moment are generally very good in Victoria and we’ll watch to see what unfolds for spring in Vic and importantly NSW and QLD.

Prices as at 2nd August

* View of current market pricing. Does not represent current Agfarm bids.

 
 

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VIC Market Update – 26/07/2019

James Ryssenbeek, Regional Manager VIC

1.5 minute read

I have been on the road again this week, tracking from Drung through to Goroke, Hopetoun and then back down to Brim. Just quietly… wow. In general, most of this part of Victoria picked up good rainfall through summer, followed up by good rains since sowing. Following the strong prices last harvest, many growers have planted Faba beans, as well as plenty of canola and vetch. The consistency of crop health and size across all crop types is impressive. However, it is important to remember last season’s outcome. A lot of growers will be looking for 2 seasons from one to catch up from disappointing results last year. It has also been a financially challenging season for some with little crop last year, followed by an expensive summer spraying program. Still, you wouldn’t trade away this start.

Most growers in the areas I have visited this week are reporting that crop health is good, but they would like to start some preventative spraying, however wind and boggy paddocks are delaying this to a point. Most growers will also be looking to start fungicide application in the coming weeks. There has been little forward selling despite the good start, with some thinking they will start looking at numbers in the coming month if the good conditions continue. A comforting thought for many if the weather does dry out as the BOM is predicting, is that hay will be a good plan B. there is enough moisture for good yields, and definitely plenty of demand – Vic drought stockpiles will need to be replaced and with NSW and QLD looking at continued dry weather, there will be plenty of homes for Victorian hay.

Pictured: cereals, pulses and canola all looking good in Victoria.

 
 
 
 
 

Prices as at 26th July

* View of current market pricing. Does not represent current Agfarm bids.

 
 

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VIC Market Update – 19/07/2019

James Ryssenbeek, Regional Manager VIC

1.5 minute read

The first week back from holidays, and off see a slice of the Western Districts! What a difference a few weeks make. It’s very wet. No driving on paddocks and many areas looking very good. There is a clear difference between early sown and late sown crops, almost a 30cm on cereals. However, with a full profile, I’d imagine a bit of sunshine and everything will take off.

Urea supplies have been problematic from Portland but not so much from Geelong. I understand from the rural merchandise teams that in last 48hrs most areas have access to meaningful volumes now which is great. Further where there have been good rains agronomists are treating smut in barley.

Markets remain weather driven. On one hand, there are a lot of good crops, on the other hand the BOM isn’t painting a great picture for spring. This has resulted in softening prices early in the week, which stabilised later in the week. Consumers are still buying as required but they are looking for cover from September through to November at the moment.

Prices as at 19th July

* View of current market pricing. Does not represent current Agfarm bids.

 
 
 
 
 

Pictured: Cereal crop looking great north west of Werneth VIC.

 

 

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VIC Market Update – 21/06/2019

James Ryssenbeek, Agfarm Regional Manager VIC

2 minute read

The weather was cooler this week and up to 25mm fell along the coast, but generally less than 10mm in most of Wimmera/Mallee and central cropping areas. I was on the NSW/Vic boarder again this week which was drier than you might think. You can see where storms have passed through, some areas look good, but more rain is required. Those with water will start irrigating soon, which is unfortunately a lot earlier than was hoped or is done historically. It is likely stock feed will be required for many along the border west of Deniliquin for some time until there is rain and warmth.

We’ve received more calls this week for grain marketing, again mostly driven by end of financial year decisions. Most callers are cleaning up the last of their onfarm or warehoused stocks. Not as many sales as calls however, with most sellers looking for around $5/MT over the bid. One crop that Victoria still has in style is lentils. The market is waiting for the $5-600/MT mark to get that moving.

Grain markets both old and new are up slightly, but trade has been thin. There hasn’t been much forward commitment yet although areas around Brim, Warracknabeal and Donald are looking very good at the moment with great in crop rainfall and subsoil moisture. The general consensus is consumers are saying they have ok coverage for now so there is little activity there. However, with some large consumers in NSW and almost no time left for new winter crop plantings that could change.

Cotton picking is basically a wrap now in Vic/southern NSW. Yields have been disappointing at 8-10bales, coupled with high costs this year driven by water and strong falls in markets over the last three months. It’s a tough job to make it work in that space today.

Pictured: Crops looking good in Barnadown VIC

 

Prices as at 21st June

* View of current market pricing. Does not represent current Agfarm bids.

 

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