Expert grains industry analysis and commentary from AEGIC’s Economics and Market Insight Team on a range of big-picture topics that affect Australia’s export grains sector.

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Horizons #101: Panama is Pana-might?

Horizons #101: Panama is Pana-might?

In 2024, delays and increased costs of shipping grain through the Panama Canal is making Australian grain more attractive to Asian buyers.

Horizons #97: Barley heads south

Horizons #97: Barley heads south

by Professor Ross Kingwell, AEGIC Chief EconomistSpatial change in global barley production has occurred over several decades. Southern hemisphere barley producers like Australia are now much more...

Horizons #91 – The Great Southland: changes in farmland values

Horizons #91 – The Great Southland: changes in farmland values

The challenge to frontier pioneers in the TV programs of my youth was: “Head west!” resulting in thousands of hopefuls trekking westwards in search of fortune. Australia’s west in recent years has certainly offered up its grain treasures, with consecutive bumper harvests in 2021 and 2022. This has fuelled farmland prices to remarkable heights (see Rural Bank 2022); despite the background challenge of a drying, warming climate (Figure 1).

Horizons #90 – The grain outlook for Ukraine: implications for Australia?

Horizons #90 – The grain outlook for Ukraine: implications for Australia?

Nightly portrayed on television screens across Australia is the destructive damage inflicted by Russian aggression in Ukraine. Russia specifically targets essential infrastructure and housing to create fear and weaken resolve among Ukrainians. As at February 2023 analysts in the Kyiv School of Economics estimate conservatively that the cost of replacing the damaged infrastructure in Ukraine is currently USD144 billion. Half of Ukraine’s energy system is destroyed and 7 million hectares (or 22%) of Ukraine’s arable land is under Russian occupation.

Horizons #88 – China’s shrinking population

Horizons #88 – China’s shrinking population

In late January 2023, China’s National Bureau of Statistics officially reported that China’s population declined in 2022 by 850,000 to 1.41 billion. There were 10.41 million deaths in 2022 but only 9.56 million births. The birth rate in China has been steadily falling over several decades (Chart 1), even despite the scrapping of its one-child policy.

Horizons #87 – For grain markets, a loss of concentration can help

Horizons #87 – For grain markets, a loss of concentration can help

Our export grain industries are exposed to concentration risk, where a single policy decision could affect the whole trade. In 2017, India purchased about 1.1 million tonnes of Australian chickpea, or 62% of Australia’s chickpea exports in that year. Only a few years later in 2022, India purchased just 0.2% (or 932 tonnes) of Australia’s chickpea exports. The huge reduction was due to India imposing in 2018 a tariff of 66% that effectively closed the market to Australian and other exporters (Figure 1). The policy change by India’s government had an immediate effect on the global chickpea trade which had left itself open to concentration risk.

Horizons #86 – Where is Ukraine’s grain going?

Horizons #86 – Where is Ukraine’s grain going?

We may think we have it tough in Australia, coping with floods, damage to roads and having problems with grain logistics. But spare a thought for Ukrainian grain producers who have experienced theft of their stored grain, missile damage to their port, road and rail systems and for some, an inability to return to their fields due to unexploded ordinances, shell holes and proximity of the conflict. For many farmers their logistics costs have doubled or trebled in 2022/23 compared to pre-war cost (Figure 1).

Horizons #85 – Grain-fed meat versus grass-fed meat: any key differences?

Horizons #85 – Grain-fed meat versus grass-fed meat: any key differences?

You go to buy some beef and are confronted by rows of meat cuts with adjectives — hormone-free, grass-fed, organic, grain-fed, extra-lean, etc. When it comes to grain-fed versus grass-fed beef, are there any key differences in the nutritional qualities of the meat? Do any of the differences greatly matter? First worth highlighting is that both grain-finished and grass-fed beef are highly concentrated sources of beneficial nutrients. Each type of beef is loaded with vitamins B12, B3, and B6; highly bioavailable iron, selenium, and zinc. Each type of beef also contains high quality protein and various lesser-known nutrients, such as creatine and carnosine important for muscle and brain functioning.

Horizons #84 – More to celebrate….well done grains industry!

Horizons #84 – More to celebrate….well done grains industry!

In AEGIC blog #82 late last year I shared farm performance metrics for grain dominant farm businesses in Western Australia (WA) that revealed their remarkable achievements. It was a cause for celebration. The WA grains industry has recorded consecutive record grain harvests, 24.0 mmt in season 2021 and 26.1 mmt in season 2022! (GIWA estimate).

Horizons #81 – Grain industry policies in plain sight

Horizons #81 – Grain industry policies in plain sight

Most people have used or relied upon “Google Earth” at some stage. Not only does it help people find their way, it also reveals how a landscape is used. One interesting application of “Google Earth” compares land use along countries’ mutual borders1.

Horizons #80 – Sad lessons from history: the war in Ukraine

Horizons #80 – Sad lessons from history: the war in Ukraine

At their zenith before 2022, Russia and Ukraine supplied around 30% of the world’s wheat exports and were globally important suppliers of barley. Additionally Ukraine was a major source of sunflower oil. Yet since Russia invaded Ukraine in February 2022, large swathes of Ukraine’s croplands have become battlefields and its grain export infrastructure has been extensively damaged. The Statistics Service of Ukraine estimates that around 40% of Ukraine’s cropland may not be planted this year and, due to the expense and difficulty of obtaining crop inputs, wheat production may be halved.

Horizons #79 – How we produce and use grains will increasingly matter

Horizons #79 – How we produce and use grains will increasingly matter

How we use grains is influenced by several factors: tradition, culture, location, income, religion, technology, attitudes, and the relative prices of the various grains. Across the globe, as individuals’ incomes increase, more calories and a greater diversity of foods are invariably consumed. Often as wealth and incomes increase, more dairy products and meats are purchased; and increasingly these foods are underpinned by grain-feeding the animals that are the primary source of those foods.

Horizons #78: Who says there’s no such thing as a free lunch!

Horizons #78: Who says there’s no such thing as a free lunch!

Australia, the ‘Great Southern Land’, is one of the few southern hemisphere sources of large exportable surpluses of grain. Most exportable grain surpluses are in the northern hemisphere. Hence, whenever North America, Europe or the Black Sea region experience drought or disruption to their grain supplies, buyers then look further afield, including southern hemisphere sources like Australia, to secure their supplies.

Horizons #77: Grain supply is not always just about price

Horizons #77: Grain supply is not always just about price

Seeing it’s the AFL 2022 finals, I’d like to start with a quote from former Footscray, West Coast and Collingwood coach, Mick Malthouse. He famously quoted a Confucian saying, “The ox is slow but the earth is patient.” The key meaning was that for a football team, change does happen, it just takes time, so you need some patience. How does this relate to grain prices?

Horizons #76: Gut-running: not really, could do better!

Horizons #76: Gut-running: not really, could do better!

The AFL 2022 finals are underway and morning coffees are likely to be full of dissection of the weekend triumphs or woes. Amid the conversations, you may very occasionally hear the word “gut-running”, referring to the players with remarkable athletic endurance.

Horizons #75: China in perspective

Horizons #75: China in perspective

Much media attention focuses on political and economic tensions between China and many other regional and western nations. In the case of Australian agriculture, attention is often focused on the trade restrictions imposed by China on a range of Australian export goods like wine, barley and lobsters. Yet China remains an important provider of many manufactured goods used in Australia, including Australian agriculture. As Figure 1 shows, there are many goods imported by Australia for which China is either the main supplier, or one of the main suppliers. In brackets after the description of each import item is the share of imports of that item that come from China.