More countries are banning agricultural exports than at any time since the 2008 food price crisis which could help producer returns.

While many countries are banning exports in an effort to maintain food security, Australia - with ample food production for local and overseas markets and no history of export bans - could benefit Australian farmers in a number of ways, potentially reinforcing our position as a preferred export source.

As the world focuses on the impacts of rising inflation and rising interest rates, a global risk-off attitude by investors has pushed CBOT wheat futures downwards, however, the price of wheat in Australia has fallen at a lower decline than overseas and growers have become keen to clear their silos and push grain into export pathways before the Northern Hemisphere new-crop hits the world market.

Western Australia is the only state where farm cash incomes increased significantly in 2021-22 according to recent data from ABARES. WA led the country with a 125% increase in projected cropping farm financial performance for the year to June 30. Apart from South Australia - which had a 5% increase - all other states reported a drop in financial performance. While ABARES notes the bumper harvest and ongoing productivity gains as the main reasons for the boost, the impact of input prices on farm returns has been highlighted.

CBH Group have announced to shareholders that supply chain fees are set to increase by $2.20 per tonne this season, with both the grower receival fee and exporters’ port terminal shipping fee increasing by $1.10/t each. The hike is attributed to elevate investment in its capital network upgrades, as CBH plans to spend $250 million per year for the next five years to upgrade its supply chain infrastructure.

It's been just over two years since China imposed restrictions on Australian barley, but a glimmer of hope has arisen with the change in Australian government. Prime Minister Anthony Albanese has initiated conversations with the Chinese government, including a letter reiterating Australia’s relationship with China won’t begin to warm until Beijing drops its politically motivated trade bans. Simultaneously, the Australian Export Grains Innovation Centre (AEGIC) hosted a webinar in Mandarin providing information on the quality of Australian malting barley.

EOFY is here! We have been hard at work here in the office finalising the implementation of tax planning strategies for our farming business clients. Tax Planning is an in-depth process as we consider whether you’re operating within the right business structure, not only for tax effectiveness, but also for flexibility, asset protection and succession planning. On the tail-end of tax planning season, if you’d like to talk further to us about asset protection or farm succession planning, please reach out and we’ll start the conversation.

All the best,