Premium prices expected for High Protein Grain
23/8/2017
Good premiums are on the cards for high quality Australian wheat producers this year, despite high levels of grain stocks world wide off the back of a record production year.
Good premiums are on the cards for high quality Australian wheat producers this year, despite high levels of grain stocks world wide off the back of a record production year.This has led to a surplus stock of lower protein and feed grain, but there is still opportunity for the higher quality producers.
According to US-based analyst Jeffrey McPike, who spoke at the recent Australian Grains Industry Conference in Melbourne, looking forward global production will be reduced to 738 million tonnes, down 16.5 million tonnes on last year.
While this is still a bumper crop by year on year averages, it’s the lower production expectations in Canada and the northern plains of America, both producers of high-protein durum and spring wheats, that is providing hope that the price will remain high for Australian producers who can supply high protein grain.
Looking at the spread of plantings in the US supports the outlook with farmers sowing more
low protein crops.
“It’s simply a varietal issue, farmers in the US … (were) responding to the price environment and the technological changes by planting a lower protein wheat,” Mr McPike said.
“So maybe this year’s spreads with higher protein will encourage them to go back to producing high protein and higher quality wheat, but it should be benefit Australian growers.”
