Ross Greenwood speaks to GrainGrowers CEO Dr Michael Southan about how El Nino will affect farmers who are already in drought-affected areas.
Introduction: How will El Nino affect farmers?
Ross Greenwood: I spoke with Senator Barry O’Sullivan. He was one of the people responsible, member of the Liberal National Party, a senator for Queensland who is responsible clearly for putting pressure on Malcolm Turnbull to call the Royal Commission into banks. Now one big issue for the banks right now is suggestions today from the Bureau of Meteorology that there could be a 50% chance of an El Niño weather event developing in Australia this year.
Now though it’s only a 50/50 toss of a coin, will it happen or won’t it, it’s still said by the Bureau of Meteorology to be twice the expectation of normal seasons. There is, if you like, a heightened awareness of an El Niño weather event and given that many farmers in Queensland, Northern New South Wales have not seen rain for a long long time, you just wonder what attitude banks will take towards them given what we’ve heard in the Royal Commission over the past week in what has clearly been reprehensible treatment of farmers who have undergone stressful situations when their banks have really just closed up shop on them.
That’s going to be a key. Now one person will be watching the weather maps no doubt very, very closely is Dr. Michael Southan who is the chief executive of Grain Growers Australia is on the line right now. I think it’s your time Michael.
Interview with: Michael Southan, CEO, GrainGrowers
Dr. Michael Southan: Yes. Good day Ross, how are you?
Ross Greenwood: Good, thank you. I mean these predictions, obviously every farmer, every person on the land has to take them in their stride but it’s also always something that at least forewarned is forearmed is how much farmers can really do if there might be these forecasts of an El Niño event coming their way?
Dr. Michael Southan: Look, not really. That’s the joy and the heartbreak of farming I suppose but certainly, we’ll have to see what happens particularly in the springtime when we have a lot of the rain being set and being filled by the crop. You can get the odd rain event that will get the crop through potentially. However, as you mentioned, and it’s been very, very dry and the ability to store subsoil moisture has been quite limiting for the growers. There is a lot of concern particularly as a lot of the crops are either gone in very late or some, in many cases, it’s not gone in at all. It’s a bit of a wait and see.
Ross Greenwood: The other aspect of it is knowing what happened in 2016 when the El Niño occurred and wheat production in particular in Australia collapsed during that period of time. Australia, being the fourth largest producer of wheat but other grains also are important, it is absolutely vital that the farmers make their calls on the growing season to either get the crops in or not to get the crops in because they really don’t want to waste the time and also the seed to actually try and put it in and then find themselves really ultimately destroyed by a lack of rain.
Dr. Michael Southan: That’s right. There’s a significant cost to get the crop in the ground. Many growers have to finance that operation. To see this expense having been put in the ground and then nothing come of it is a real heartache. Growers are getting smarter at how they manage that. They are looking at ways to take out insurance to try and protect some of that investment and also, looking at ways where they can hopefully not lock themselves having to sell all their crop at one time or at one price.
It’s a very difficult industry to work in but it’s part of farming. Farmers accept that. They take the good with the bad and certainly, a lot of the work that we’re doing with them is to help them roll out these sorts of dry years.
Ross Greenwood: You make a pretty salient point there about the cost of actually trying to get the grain into the ground or the seed into the ground in the first place. In terms of typical farms, typical grain farms, what sort of money is involved in that type of thing? I presume diesel is obviously the labor cost which to a certain extent is in many people’s cases just their own labor, but it’s obviously a fairly expensive time and also, one where you’re taking the gamble that you’ve got your timing right in terms of the seasonal factors.
Dr. Michael Southan: That’s right. You’ve got the cost of your consumables. Fertilizer, it can really add up to significant cost. The cost of seed, if you had to go out and sought the new variety, there can be significant costs with that. As you mentioned, the cost of fuel is significant. Then, the wear and tear on the equipment. Then, on top of that, the cost of labor to put that crop in. A lot of growers these days are running very big operations that when they start sowing, they’re going 24 hours a day around the clock for weeks on end.
There is a massive investment up front and that’s what happens with cropping, you’ve got to get the crop in. It’s a timely operation and you’ve got to be prepared to spend the money when you need to.
Ross Greenwood: There are lot of farmers also would have one eye constantly on the Bureau of Meteorology website to try and see whether there’s a few drops of rain coming their way or not. The technology has improved, there is no doubt, but not withstanding the technology improving, it doesn’t necessarily help you if the rain’s not really got the band of rains is not coming over the top your property.
Dr. Michael Southan: Yes, that’s right. We see growers who might cop out a really good downfall, they might cop a storm. That helped some of their paddocks whereas down the road, they might have another adjoining farm if it misses out altogether. What we’re really looking for are those widespread rain events that bring confidence to the industry because you do get that rain falling over a wide area of the cropping belt.
Ross Greenwood: That’s precisely what they need right now. Dr. Michael Southan is the chief executive of Growing Grains in Australia. As I say, we’re speaking to him on the back of that report that came out late today from the Bureau of Meteorology which has upgraded its forecast of an El Niño weather event occurring across Australia this year, now raising the chances of that to 50%. They’re saying that is twice the prospect or the possibility of normal growing seasons around Australia.
Of course, it affects people in rural and metropolitan areas but from an economic point of view, it is obviously the rural economy that is most potentially affected. Michael, we appreciate your time here on the program tonight.
Dr. Michael Southan: Thanks very much Ross
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