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Agflation: Grain prices to rattle beef, dairy, pork, eggs and chicken: “disaster unprecedented in Australian history” predicts Horticulture Coun­cil chief

Posted by gasweek on 18 September, 2007

It’s called agflation and it’s coming very soon, propelled by climate change and drought. Grain prices have hit record levels, and those prices will ram­ify through the feed chain —beef, dairy, pork, eggs and chicken — and reach consumers. Australian Horticulture Coun­cil chief executive Kris Newton says the severe cutback in irriga­tion water could result in price rises, as seen with bananas after Cyclone Larry, reported Asa Wahlquist in The Australian, (15/9/2007, p.33).

Biofuel competition, drought: “But that will be across all the commodities,” Newton said. “We are facing a disaster unprecedented in Australian his­tory. I can’t think of anything in agriculture that comes even close.” Grain prices are rising due to increased demand from the bio­fuel sector, along with a series of weather events leading to crop failures this year, which have resulted in world grain stocks being at a 30-year low”.

World grain prices spike: Australian Lotfeeders Associa­tion president Malcolm Foster has been campaigning against mandated ethanol in petrol. “It is putting extreme pressure on the world grain prices, be­cause of what the US has done,” Fraser said.

Water prices spike: Along the Murray River, irri­gation allocations have been slashed. On the NSW side of the Murray they are zero, on the Victorian side 5 per cent, and in South Australia 13 per cent, rising to 16 per cent next month. Only on the Murrumbidgee do growers have enough water to survive, with 60 per cent of high-security allocations. Australian Farm Institute executive director Mick Keogh says: “The thing that scares me this time is when you add the widespread nature of the drought to the lack of water.

Trainer-wheels grain-traders go bust: “There is not a sector of agriculture, with perhaps the exception of some of the coastal fruit and vegie and the northern beef industry, that are missing out. I can’t recall that sort of widespread impact before.” The grain industry is full of rumours about grain growers, new to hedging, being badly caught out.

The Australian, 15/9/2007, p. 33

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