Biofuels power Aussie grain farms

The Australian Bureau of Agriculture and Resource Economics is expecting
grain production to bounce back this year, said ABARE’s Vince O’Donnell at
the Outlook conference in Canberra. “The low world grain stocks are
pushing world prices up, due to “increased demand for feed grains for
biofuels, combined with theexpansion of intensive livestock industries”, he
said.

Better years to come
ABARE executive director Phillip
Glyde said 2006-07 had been a tough year, with grain growers in eastern states
particularly hit hard. “The upside is we are expecting agricultural commodity
prices generally to be holding up into 07-08, so, if they can get a crop in the
ground and we get a return to normal seasonal conditions, then I think it is a
good story,” he said.

Forecasts
Winter cereal production, assuming normal
seasons, is forecast to be 38.4million tonnes, 23 million above last year’s
drought-reduced crop. “We are expecting a fairly strong rebound from the drought
and probably stronger than what we have seen from the last few droughts,” Mr
Glyde said.

World wheat prices are currently at their highest level for 10 seasons, at
$242 a tonne, up from $191 a tonne last year. ABARE is forecasting a 21% rise in
the value of wheat exports, up to $3.8billion. Mr O’Donnell said demand for
biofuels was expected to drive demand for grains and oilseeds in the medium
term.

Related links:
ABARE
Dossier All About Bio Energy

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