Nutrition

News 171 views last update:6 Aug 2012

Australian drought causes soaring feed prices

The worsening El Nino-driven drought has cut pasture supply, forcing ranchers to flood sale yards with livestock they can't feed. Animal feed prices have risen in line with the 74% rise in the price of corn and wheat's 51% advance.

Tobin Gorey, commodity analyst at Commonwealth Bank of Australia, said: "The longer this dry weather goes on, the less chance prices have of recovery. There are not a lot of crops around from this year's winter crop so it's expensive anyway and the pasture growth isn't going to be there if it's dry." Gorey adds that ranchers aren't confident that they can feed their animals.

The latest report from the Australian Bureau of Agricultural and Resource Economics paints a dire picture for the country's agricultural sector. More than half of Australia's farmland is now officially classified as drought-stricken. The bureau also says that production of the three main resource crops - wheat, barley and canola - will be cut by more than 60% in 2006/07. The national commodity forecaster said wheat output may fall to a 12-year low of 9.7 million tonnes.

The indirect effects of the Australian drought are being felt worldwide: Global wheat prices recently hit a 10-year high, fueled by supply worries sparked by the country's dismal crop forecasts.
 
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