In April of last year, we looked at the potential of another Bin Burster season and, as improbable as it seemed at the time, 21/22’s crackingly big receival record lasted all of 12 months. GIWA’s final forecast for 22/23 is 26mt (total harvest including on-farm grain) and, at the time of writing, CBH has clocked over 22mt with more reported to come from temporary storage (sheds, silos, bags or just a pile in the paddock). All four port zones have ‘busted their bins’ and there is barely a growing region that has not at least reached average yields, with plenty receiving their best ever results.
The season was set up with a solid early break, but it was the duckling down soft finish that provided the record breaking tonnes. For growers on the South Coast, they must have been thinking they were harvesting in Canada, given the cool weather and number of rainfall days they experienced late into November. But the memories of a frustrating harvest fade at the same rate the bank overdraft is paid back and, with more than a few shillings left over for a new bit of kit or even the farm down the road, 22/23 will provide pleasant vibes for years to come.
As forecast, the record size of the canola harvest is a season standout, with over 4 million tonnes handed over to the care of CBH. Only a few years back, a good canola harvest would peak at 1 million tonnes. However, with growers seeing four figures a tonne prices at seeding time, it is no surprise barley, oat and lupin paddocks were pulled for additional fields of gold. Although bids fell back 30% over the growing season, locking in a farm gate price with a seven in front was hardly a disaster. Remarkably, canola alone will generate over $3 billion dollars for growers in 22/23, thus proving that lightning can strike twice.
Other noteworthy results include:
· Fatter than butter lupin yields resulting in over 800kt harvested, outpacing last year’s large crop, despite fewer hectares being sown.
· Protein levels lower than a dugite’s gut across all of the cereals. The cost of fertiliser discouraged that last dose of Nitrogen and the duck down finish diluted what was already applied.
· Oat tonnes falling into fifth spot, initially due to high canola and feed barley prices winning the competition for paddock space, and then a last minute slash of crops as oaten hay prices spiked, with large sections of the East Coast hay crop being lost to floods and untrafficable paddocks.
The next question is what to do with all this grain? There is no doubt the world wants it, with wheat S&D being the tightest we have seen for a decade but, as we saw with last year’s harvest, the state’s supply chain can only export so much. Roughly 4.5mt of carryover from 21/22 was still in CBH at the beginning of the 22/23 (October) season and, with a new record of receivals, the export task seems insurmountable.
However, a few things are different this year compared to last:
· The Covid impact on the local workforce has lessened (at least for now). Fewer sick and quarantined port operators, truck and train drivers means more grain on ships.
· Although sea containers do not move a lot of WA’s grain, the Covid supply chain impact on container availability last year cramped local packers’ operations. Theoretically another half a million tonnes could be sent in boxes with improved ‘empties’ availability.
· CBH is throwing everything they have trying to get tonnes flowing like a firehose to port. Harvest shipping was 57% higher than last year, including a record 2.1mt shipped in December. If that pace continues, ports will empty faster than an esky at a 21st birthday.
Countering this is news of industrial action at CBH’s number one port, Kwinana. It is possible that CBH would have released further additional capacity to the market without the uncertainty surrounding the impact strikes could have on shipping capacity, which would in turn increase the competition for grain – and potentially prices. No doubt, this would be front of mind for the negotiating parties. As they say, timing is everything.
Nonetheless, it does not take a particularly brave pundit to predict that CBH will ship out a new record this year and the market is factoring that in. In the last couple of months, global prices have drifted back and closed in on local offered prices which have been steady (taking into account the AUD). Accordingly, basis has been whittled back and, in the case of higher protein wheat, ventured into positive territory at times.
It is unlikely that harvests of this magnitude are the new norm but, just in case, the best way to deal with bin busters is to get rid of the grain as quickly as possible.
