Grain prices soar as crops fail

South Australia had cut its forecast for total grain production this harvest by 21 per cent, helping push global wheat prices to a record, reported The Age (7/9/2007, p. B3).

Wheat prices double: The state might produce 5.5 million tonnes of all grains this harvest, down from an estimate of 6.98 million tonnes last month, Rural Solutions SA said in its latest crop report. Wheat prices had more than doubled in the past year as global demand outpaced supply and stockpiles shrank.

Crops dying: Two months of below-average rain and warmer than average weather have prompted reductions to forecasts. "Significant rainfall is needed immediately to stabilise crop yield potential at current levels," Rural Solutions SA said in the report on its website. "In the driest areas on Eyre Peninsula and the upper north, crops are dying off and will not recover, while other crops have been grazed or cut for hay if they have sufficient bulk."

Production down more than a fifth: Wheat futures for December delivery rose to a record $US8.49 a bushel on the Chicago Board of Trade on 6 September. South Australia might produce 2.58 million tonnes of wheat, down 24 per cent from the previous forecast, the agency said. Output of barley might be 1.9 million tonnes, 21 per cent lower than the estimate of 2.4 million tonnes a month ear­lier. South Australia was the country’s largest barley growing state.

The Age, 7/9/2007, p. B3

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