The year opens with milling grade Hard 2 wheat trading at $451 a tonne delivered to Melbourne end users, a $172 hike over the same time last year.
Australian General Purpose wheat prices have strengthened more in the past year and have been trading in limited volume at $429 a tonne delivered to Melbourne.
The tail end of the southern harvest continues following the delays caused by rainfall last month. The 90mm of rain that has fallen in the southern Wimmera and Western District during November and December has caused some wheat to succumb to the enzymatic breakdown of starches in the grains.
Growers in the west Wimmera have achieved falling number readings of 230 to 250 seconds, below the 300 seconds minimum required for milling wheat classification.
The dry winter and early spring combined with the wet and mild finish to the growing season in the Wimmera and Mallee has had some unexpected consequences. Wheat crops that had reached harvestable yields have produced Hard grade 1 quality.
With a small number of grains in each head that all filled in the mild conditions, protein levels of over 15 per cent were achieved.
Feed grade one barley prices are also firm trading at a nominal $390 delivered to stockfeed mills in Melbourne and the Western District. After trading at a $5 a tonne premium to AGP wheat during August, the price discount for F1 barley has extended to $49 a tonne. This is an attractive discount for barley buyers in Victoria as most of the east coast market is being set from the price of wheat and barley imported from Western Australia.
The price discount for F1 under AGP in Western Australia is currently $30 a tonne.
Livestock operators who depend on grain for their production are struggling with the ramped up grain prices. While barley is a cheaper grain in absolute terms, AGP wheat and F1 barley are priced at a similar level when considered on a cents per megajoule basis.
For most livestock producers the high grain prices are biting deeply into their profitability. Dairy farmers in the Goulburn and Murray Valleys are struggling and the level of grain and concentrates in many herds has fallen from 8kg per cow to under 5kg.
