Ukraine invasion likely to affect farmers
LAST month’s Russian invasion of Ukraine in likely to result in higher fertiliser, fuel and herbicide costs for Toodyay farmers. The price of wheat and canola – already at near-record highs – is also expected to rise due to US-led trade sanctions against Russia.
By Frank Panizza, Toodyay Agriculural Alliance
The war in Ukraine, although a long way from home, has ramifications right here in Toodyay.
The tragedy of the needless loss of life and suffering is obvious, and economic impacts will be widespread and will be felt worldwide.
Ukraine and Russia export a very large amount of grain to world markets.
The two countries export on average 60,000,000 tonnes of wheat all via the Black Sea, often referred to as the Black Sea ports.
The passage from the Black Sea into the Mediterranean, and then to world markets is via a narrow straight situated near Istanbul, which in places is only 300 metres wide.
The Black Sea ports export 30 per cent of the world’s wheat, easily eclipsing Australian wheat exports (pictured above at Esperance).Read more
The outbreak of war in the region has already had a significant effect on shipping in and out of the region.
Russia and nearby Belarus produce a large amount of the world’s fertilisers, some imported directly into Western Australia.
Supply and pricing will be affected by new trade sanctions imposed by Western nations on those two countries.
The likely effect on local farmers will be an increase in cost of fertilisers, fuel and some herbicides.
The interruption to production and export shipping caused by the hostilities will lead to increase in prices, for wheat particularly.
Some international market commentators suggest it could be as much as 30 per cent.
Canola prices are already at near-record highs, will likely remain strong and also have the potential to rise further.
The Black Sea ports also export canola, although on a lesser scale than for wheat and corn.
Meanwhile, local farmers are now busy with paddock preparation and livestock husbandry duties.
Most producers managed to squeeze a few weeks away from their farms in January.
Harvest finished very late last year, with many farmers finishing their harvest in January for the first time in decades.
The ideal time to finish is the week before Christmas, which avoids all the non-work days between Christmas and New Year.
Last year’s harvest was a record for Western Australia, easily exceeding 20,000,000 tonnes of grain.
This record production was a result of a wet growing season and a very mild Spring which allowed crops to mature without heat or drought stress.
Toodyay farmers also enjoyed a very good harvest, although waterlogging was very evident in parts which generally reduced yields from the many record yielding crops in areas of the state further north and east.
Prices for sheep and cattle continue at record levels.
Consistent high prices are now becoming the norm.
Continuing export demand and grazier re-stocking have driven prices to new levels, to prices that many industry insiders suggest will be the new norm.