Here we take a look at the global grain prices and how they are impacting livestock industries in Australia.

Late 2007 saw global grain prices reach an all time high, doubling the level of only two years earlier.

The increase has been partly driven by increased demand for grains for biofuels globally, which has seen grain diverted from traditional human and animal consumption channels.

Poor cropping seasons in a number of countries, including Australia, have severely reduced supplies, also contributing to the increased price.

The increase has had the most profound impact on industries such as poultry, pigs and feedlots, where animals are typically grainfed and feed is generally producers’ most significant cost.

ABARE estimates that in 2007-08 wheat production will be around 12.7 million tonnes, barley production will be around 5.5 million tonnes and canola production around 931 000 tonnes.

Although these winter crop production levels are significantly higher than production in 2006-07, they remain well below average. As the intensive livestock industries, particularly feedlot cattle and poultry, are projected to continue to expand, the reliability of feed supplies at competitive prices is becoming increasingly important.

The recent severe drought in most parts of the country has highlighted the importance of security of feedgrain supply to the livestock industries. The drought sharply curtailed winter grains production in 2006-07 and has had severe adverse effects on Australian summer grain crops. In the case of the principal crops, compared with 2005-06, production of wheat and barley in 2006-07 fell by more than 60 per cent, while grain sorghum production is forecast to fall by 50 per cent.

The drought also had significant negative impacts on pasture growth, which has placed pressure on stocks of both grain and fodder.

Reduced availability of feed can place pressure on growers to source feed from a wider range of locations, as seen in our previous article in the ‘Farm Biosecurity: The Issues’ section, and it is here where one of the greatest biosecurity challenges will lie.