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Sorghum production forecast to be lowest in 50 years…

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What a difference a month makes. Substantial rainfall across the majority of nation’s winter and summer cropping regions over the last four weeks, on top of isolated storms in the preceding five weeks, has swung the mood across rural Australia from one of heightened pessimism to one of guarded optimism.

The vision on our television screens of flooded roads, overflowing gutters, children playing in puddles and farmers dancing in the rain have been a welcome distraction from the summer bushfires and the global coronavirus pandemic.

While there is still a long way to go, the general change to the weather pattern has growers and consumers across the country genuinely excited about crop prospects for 2020 and the possibility of a significant turnaround in domestic grain supply compared to the previous two seasons.

After such a prolonged dry spell, particularly in the eastern states, the soil moisture in many regions was at record low levels entering 2020. Replenishing those soil moisture reserves will be a long process with above-average rainfall required for a prolonged period of time.

The recent widespread falls have started the process of reducing the significant rainfall and soil moisture deficits accumulated over the last couple of years. However, despite substantial registrations in many locations, most were still below the long term average for the December to February period.

The rainfall has not been confined to the cropping regions. Drought affected pastoral districts have seen an unbelievable turnaround in pasture growth and feed availability. But most graziers were forced to substantially reduce stock numbers during the drought as the cost of maintaining livestock became prohibitive.

They are now looking to restock as quickly as possible to utilise the abundant forage. The challenge here is the rains have been so widespread that the demand for restocking quality sheep and cattle is unprecedented. It has forced the price of store stock in sale yards across the country to extraordinary levels.

Many livestock producers who have the option of planting a winter crop are looking to sow paddocks that haven’t seen a tractor for many years as the costs involved in buying stock make growing a crop a much better financial option this season.

Growers with mixed farming enterprises will almost certainly have an extra paddock or two allocated to winter crop when planting commences as their livestock numbers are well below normal levels. This means that the potential area available for winter cropping in the eastern states of Australia in 2020 will be substantially higher than in recent years. The potential for a big crop is building, but there is still a very long way to go.

Meanwhile, in Queensland and northern New South Wales, the limited area sown to sorghum this summer now has a genuine shot at achieving average yields, assuming regular rainfall continues for the balance of the growing season. It is extremely difficult to get an accurate handle on the actual area sown as the planting rains came so late. Suffice to say it was well below the total area growers intended to plant if the rains had been timelier.

At this stage, total production in Central Queensland, Southern Queensland and New South Wales are estimated to be 250,000 metric tonne, 125,000 metric tonne and 75,000 metric tonne respectively. That comes to a total of 450,000 metric tonne and would make it the smallest Australian sorghum harvest since the 1969/70 season.

One of the biggest challenges of a late sown sorghum crop in southern Queensland and northern New South Wales is the autumn/winter harvest. Getting grain moisture readings down to acceptable levels can be a challenge as the days are quite short, there is invariably a morning dew, and the daytime temperatures are much cooler. The harvest also tends to be occurring when the winter crop is being planted which strains farm resources and challenges management priorities.

In international sorghum news, the United States Department of Agriculture has revealed, via its daily reporting system, that China has purchased 110,000 metric tonne sorghum. The global trade has been waiting for news of grain sales to China as a sign that it was starting to fulfil the Phase 1 commitments it signed off on in mid-January.

Last week’s transaction is the first single sale of more than 100,000 tonne of any agricultural commodity to China since the trade deal was signed. As part of the continuous disclosure regulations in the United States, exporters must promptly report such transactions, commonly referred to as flash sales. Sales of smaller amounts only have to be reported on a weekly basis.

According to USDA export data, China has booked more than 475,000 metric tonnes of sorghum this marketing year. However, that total does not include sales of 325,000 metric tonne to ‘unknown destinations’ in the third week of February. Sales tagged accordingly are usually destined for China, and the trade is confident they were the buyer in this instance.

The USDA estimates that the US farmer planted 1.9 million hectares of sorghum last summer. This is 7 per cent lower than the previous two seasons and is well down on the peak of 6.7 million hectares back in 1986/87. Production in that year was just short of 29 million metric tonne, compared to 8.7 million metric tonne this marketing year.

China has been a traditional destination for Australian sorghum in recent years, particularly for the Baijiu market, But, one thing is certain, Australia will not be challenging the United States for bulk sorghum business into China in 2020.

Concerns are mounting over this season’s sorghum production

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Concerns are mounting over this season’s sorghum production…

It is now the end of October, two months into the summer crop planting season, and virtually no sorghum has been planted in northern New South Wales and southern Queensland.

These cropping regions traditionally have a summer dominant rainfall pattern. However, that tradition has been seriously challenged in recent years, with the region in the grips of a drought, the likes of which has never been previously experienced.

Basically, the tap turned off in late October 2016, and rainfall since then has been well below average across almost all districts. This means that the soil moisture profile in most of the summer cropping regions of Australia remains at, or near, record low levels.

In addition, the water storages that usually supply irrigation water to the region are extremely low, and zero water allocations in most river systems reflect the dire situation facing the irrigation industry in the Murray-Darling Basin this summer.

Much of this year’s winter crop in northern New South Wales and southern Queensland was not planted due to the lack of soil moisture. Concern is now mounting that the same scenario may play out for this season’s sorghum crop.

Planting of sorghum in these regions normally starts in early spring with the primary requirements being an adequate soil moisture profile, the soil temperature at, or above, 16°C and rising, and the risk of frost has passed.

However, planting sorghum in November is traditionally shunned in northern New South Wales and southern Queensland. This is a strategy to reduce production risk by avoiding flowering in the peak of summer. As a result, there are typically two distinct planting windows. The soil temperature and frost thresholds are well behind us, but most growers require a minimum of 100-150mm of slow, soaking, rain, preferably of a couple of falls, before they would consider planting.

There is an early planting window which opens as soon as conditions are suitable but shuts at the end of October. Then there is the late planting window that goes from early December through to early, or even as late as mid-January, depending on geographic location.

With the traditional early planting window all but closed, it will be fascinating to see how growers react if they receive enough rainfall to plant before the end of November. Will they plant immediately or stick to a proven formula and delay until early December?

In the last two springs, many growers planted sorghum on a less than ideal soil moisture profile. They were banking on average to above average summer rains to get the crop through to harvest. Unfortunately, the rains did not eventuate, and the crops suffered accordingly. Growers cannot afford a third summer crop failure, and there will be a distinct reluctance to plant unless the soil moisture profile is full, or almost full.

Nevertheless, it is definitely not too late to get a significant sorghum crop in the ground. And there is always Central Queensland to help save the day. Harvest of an above-average winter crop is now winding down in that region and the traditional sorghum planting window of January through to mid-February is still two months away.

National production of as much as 1.5 million metric tonnes (MMT) is still possible, but the likelihood is falling with each dry day. When the rains do arrive, growers will undoubtedly react quickly as long as it is not too late. If it is, they will focus on retaining the soil moisture for a big winter crop plant in the autumn.

Domestic sorghum demand generally fluctuates between 850,000 metric tonne (MT) and 1.2MMT per annum, depending on the price of sorghum relative to alternative feed grains such as wheat and barley.

Sorghum is used as a source of starch in the ethanol industry on the Darling Downs. While the plant can use barley, it is not the preferred feedstock, and as such the annual sorghum demand of around 180-200,000MT is relatively inelastic. The same can be said for 400,000MT of core demand from the poultry sector in New South Wales and Queensland, although that has been decreasing in recent years.

A quick look at recent production history suggests that Australia generally produces at least 1 million metric tonnes. In the last 25 years, there has been only one year where production was less; 2016 production was 994,000MT. And one has to go back as far as 1992 to find a year where production was significantly lower at 550,000MT.

At the moment, most in the trade would still have sorghum demand pencilled in for 800,000MT to 1MMT. If sufficient rain fails to arrive in the next two months to achieve production of that magnitude, some serious demand rationing will ensue. And white grains from Victoria, South Australia and Western Australia will be called upon to fill the void.

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