Weekly Australian Climate, Water and Commodity Price Update 7 April 2011

The full report is available from www.abares.gov.au

Summary of key issues Australia experienced its wettest March on record in 2011, with most of the country

recording above average rainfall (Bureau of Meteorology Monthly Climate Summary for Australia, March 2011).

Average to below average rainfall over south-west Western Australia during March 2011 has maintained areas of rainfall deficiencies for the January 2010 to March 2011 period (Bureau of Meteorology Drought Statement, 6 April 2011).

Buffalo fly numbers have increased in western New South Wales due to wet conditions and are reportedly causing production losses in cattle.

Mouse numbers in the New South Wales Goulburn Murray region have increased over recent weeks, with monitoring and control activities underway.

Water storage levels in the Murray–Darling Basin (MDB) increased this week by 143 gigalitres to approximately 83 per cent of total capacity. This is 56 percentage points or 12 610 GL more than this time last year.

The world wheat indicator price (US Hard red winter, 11.5 per cent protein, free on board, Gulf ports) averaged US$357 a tonne for the week ending 5 April 2011, a 7 per cent rise from the previous week.

The world market indicator for cotton (Cotlook ‘A’Index) was US228 cents a pound on 6 April 2011, an increase of US6 cents a pound over the last week.

Prices for sheep and young cattle remained high last week as a result of strong demand from both restockers and processors, and wet weather restricting movement of cattle to market in Queensland.

Vegetable prices continued to decline in the week ended 1 April 2011, as vegetable supplies recover from the weather disruptions of early 2011.

Most fruit prices, including for bananas, were largely steady in the week ended 1 April 2011, although the prices of rockmelons increased in line with reduced supplies toward the end of the production season.

The Japanese Ministry of Agriculture, Forestry and Fisheries’ reported that as of 6 April 2011, the value of losses to crops and livestock as a result of the March 2011 earthquake and tsunami is estimated at around $67 million. The main damage has been to rural infrastructure and land.

For more information or to subscribe, email ClimateUpdate@daff.gov.au

1. Climate1.1 Notable events For the week ending 6 April 2011, rainfall was mostly recorded in the north and east of the country. The

highest measured total for the week was 402 millimetres at Maningrida, north-east of Darwin in the Northern Territory.

Nationally, Australia experienced its wettest March on record in 2011, with most of the country recording above average rainfall (Bureau of Meteorology Monthly Climate Summary for Australia, March 2011). Maximum temperatures were also the coldest on record, with a national anomaly of -2.19 degrees Celsius.

Average to below average rainfall over south-west Western Australia during March 2011 has maintained areas of rainfall deficiencies for the January 2010 to March 2011 period. It is unlikely that these deficiencies will be reduced in the coming months due to the low rainfall generally expected at this time of year (Bureau of Meteorology Drought Statement, 6 April 2011).

Wetter conditions in western New South Wales have increased buffalo fly numbers. These flies, which are normally restricted to Queensland and coastal regions of New South Wales, are reportedly causing production losses in cattle due to intense irritation.

Mouse numbers in the Goulburn Murray region have reportedly increased over recent weeks due to the favourable seasonal conditions. Producers have been encouraged to monitor and control mice numbers by reducing food sources and disrupting nesting.

Heavy rainfall over recent months has reportedly damaged rural infrastructure and reduced potential cane production in the Hinchinbrook region, Queensland.

1.2 Rainfall this weekFor the week ending 6 April 2011, rainfall was mostly recorded in the north and east of the country. For further information, go to www.bom.gov.au/climate/current/weeklyrain.shtml.

Rainfall for the week ending 6 April 2011

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1.3 Temperature anomalies this weekSpatial temperature analyses are based on historical weekly temperature data provided by the Bureau of Meteorology. These temperature anomaly maps show the departure of the maximum and minimum from the long-term average. Temperature anomalies are calculated using high resolution gridded datasets from 1911 onwards. For further information on temperature anomalies, go to www.bom.gov.au/jsp/awap/.

Maximum temperature anomalies for the week ending 5 April 2011

Minimum temperature anomalies for the week ending 5 April 2011

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1.4 Rainfall outlookThe rainfall forecast below is produced from computer models. As it contains no input from weather forecasters, it is important to also check local forecasts and warnings by the Bureau of Meteorology.

Total forecast rainfall for the period 7 – 14 April 2011

1.5 Rainfall deficiencies

Rainfall deficiencies for the 15-month period from January 2010 to March 2011

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2. Water2.1 Water availability Water storage levels in the Murray–Darling Basin (MDB) increased this week by 143 gigalitres (GL) to

approximately 83 per cent of total capacity. This is 56 percentage points or 12 610 GL more than this time last year.

There has been no trade in the three representative major temporary water markets this week.

2.2 Water storage in the Murray–Darling Basin (NSW, Victoria and Queensland)

Information on irrigation water available in the Murray-Darling Basin from 1 January 2001 to 7 April 2011 is shown below. The green line indicates the storage level at the same time last year. The orange line indicates the amount of ‘dead’ or unusable storage.

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2.3 Water trading

Pricing ($/ML) of selected temporary trade in allocations, MDBa

Trading Zone 6 April 30 March 23 March 16 March 9 March 2 March 23 Feb

NSW Murrumbidgee I.A. No trade No trade No trade No trade No trade No trade No trade

VIC 1A Goulburn No trade No trade No trade No trade No trade No trade No trade

SA Murray No trade No trade No trade No trade No trade No trade No tradea Last traded prices as at the dates shown.

Volume (ML) of selected temporary trade in allocation, MDBb

Trading Zone 6 April 30 March 23 March 16 March 9 March 2 March 23 Feb

NSW Murrumbidgee I.A. No trade No trade No trade No trade No trade No trade No trade

VIC 1A Goulburn No trade No trade No trade No trade No trade No trade No trade

SA Murray No trade No trade No trade No trade No trade No trade No tradeb Volumes of water traded as at the dates shown.

Recent trading (last 12 months)

Historical trading (last 6 years)

Source: Waterexchange(Note: Data do not include trade through private brokers or other exchanges and trade over recent days; hence prices

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may differ from those reported above. Price series for Goulburn and South Australia Murray are very similar and have not been included).

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3. Commodities3.1 Production and commodities

The world wheat indicator price (US Hard red winter, 11.5 per cent protein, free on board, Gulf ports) averaged US$357 a tonne for the week ending 5 April 2011, a 7 per cent rise from the previous week. The higher world price reflects recent United States Department of Agriculture (USDA) reports that downgraded the condition of the US winter wheat crop and lowered quarterly corn stocks below some market expectations. Prices were higher despite another USDA report showing an 8 per cent rise in intended area planted to both spring and winter wheat.

The world corn indicator price (US no. 2 yellow corn, free on board, Gulf ports) averaged US$315 a tonne for the week ending 6 April 2011, a 9 per cent rise from the previous week. Higher prices were underpinned by a USDA report that quarterly corn stocks were lower than some market expectations, even though the area of corn intended to be planted in the United States rose by 5 per cent.

Australian wheat exports (excluding wheat flour) increased by 3 per cent in February to 1.8 million tonnes, the highest export volume since March 2009. Eastern states exports totalled 1.3 million tonnes, the highest since April 2002. Source: Australian Bureau of Statistics. International Trade, cat. no.5368.

The world market indicator for cotton (Cotlook ‘A’Index) was US228 cents a pound on 6 April 2011, an increase of US6 cents a pound over the last week. Data released by the USDA on 31 March 2011 indicated cotton plantings of 5.18 million hectares in 2011-12, up from actual plantings of 4.45 million hectares in 2010-11, but below the market expectation of around 5.34 million hectares.

The Eastern Young Cattle Indicator (EYCI) hit a historic high of 424.50 cents per kilogram during the week, driven by continued strong demand and reduced yardings in Queensland in the wake of heavy rainfall in many grazing areas of the state. Trade lamb prices for the week were also higher at 646 cents per kilogram carcass weight, reflecting a shift toward increased yardings of heavy lambs as a result of generally favourable seasonal conditions in the eastern states. Restocker demand drove Merino lamb prices 17 cents higher to 587 cents per kilogram carcass weight.

Vegetable prices continued to decline in the week ended 1 April 2011, as vegetable supplies recover from the weather disruptions of early 2011. Recent continued rainfall in north Queensland and a second episode of flooding in Tasmania in late March 2011 has however; reduced current vegetable plantings and this can be expected to put upward pressure on prices around mid-year.

Banana prices steadied in the week ended 1 April 2011, after rising rapidly in the aftermath of damage to north Queensland banana crops from Cyclone Yasi in early February 2011. The rise in banana prices after Cyclone Yasi has closely mirrored the rise in price after Cyclone Larry in mid March 2006. Based on this previous experience, banana prices are not expected to peak until around June 2011.

Most other fruit prices were also steady for the week ending 1 April 2011, with the exception of rockmelons that are in reduced supply as production reaches the end of the season.

In comparison to this time last year, fruit and vegetable prices averaged higher in the March quarter of 2011, compared with the same quarter in 2010. Higher prices mainly reflect the effects of reduced supply due to heavy rain and flood damage in eastern Australia, northern Tasmania and the Gascoyne region of Western Australia.

The simple average wholesale price increase between the March quarters for the vegetables reported in Figure B, for example, was 37 per cent in Brisbane, 33 per cent in Perth, 28 per cent in Melbourne and 26 per cent in Sydney.

The simple average wholesale prices of the selected fruit in Figure C were also higher in the March 2011 quarter compared to the same quarter in 2010. The prices were 42 per cent higher in Brisbane, 32 per cent in Sydney, 30 per cent in Melbourne and 26 per cent in Perth. Only the prices of cherries and lemons were lower in all markets compared with the March quarter in 2010.

The Japanese Ministry of Agriculture, Forestry and Fisheries’ reported that as of 6 April 2011, the value of losses to crops and livestock as a result of the March 2011 earthquake and tsunami is estimated at around $67 million. The main damage to agriculture industries is estimated to have occurred to infrastructure and land, at around $5 billion. Damage to livestock housing is estimated at around $370 million.

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3.2 Crop indicator prices

3.3 Livestock indicator prices

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3.4 Historical movements in fruit and vegetable prices

Figure A: Post cyclone trends in banana prices, Melbourne wholesale market

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Figure B: Changes in selected vegetable prices, March quarter 2011 versus March quarter 2010

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Figure C: Changes in selected fruit prices, March quarter 2011 versus March quarter 2010

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3.5 Recent movements in fruit and vegetable prices

Weekly wholesale prices for selected vegetables, Melbourne market

Weekly wholesale prices for selected fruit, Melbourne market

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4. Data attributionClimateBureau of Meteorology Weekly rainfall totals: www.bom.gov.au/jsp/awap/rain/index.jsp

Maximum and minimum temperature anomalies: www.bom.gov.au/jsp/awap/temp/index.jsp

Rainfall forecast: www.bom.gov.au/jsp/watl/rainfall/pme.jsp

Seasonal outlook: www.bom.gov.au/climate/ahead

Drought statement: www.bom.gov.au/climate/drought/drought.shtml

ENSO Wrap-Up: www.bom.gov.au/climate/enso/

WaterMurray–Darling Basin Murray–Darling Basin Authority: www.mdba.gov.au/water/waterinstorage

New South Wales New South Wales Water Information: http://waterinfo.nsw.gov.au/

Snowy Hydro: www.snowyhydro.com.au/lakeLevels.asp?pageID=47&parentID=61&grandParentID=4

Queensland Sunwater: www.sunwater.com.au

seqwater: http://seqwater.com.au

South Australia SA Water: www.sawater.com.au/SAWater/Environment/TheRiverMurray/River+Murray+Levels.htm

Victoria Goulburn-Murray Water: www.g-mwater.com.au

Water trading Waterexchange: www.waterexchange.com.au

CommoditiesFruit and vegetables Datafresh: www.datafresh.com.au

Mutton, lambs, wheat, barley and grain sorghum The Land: hardcopy or online at http://theland.farmonline.com.au/markets.aspx

Cattle, mutton, lambs and pigs Meat and Livestock Australia: www.mla.com.au/Prices-and-markets

Canola Weekly Times: hardcopy

Impact of the earthquake on Japanese agriculture Ministry of Agriculture, Forestry and Fisheries of Japan: www.maff.go.jp/j/press/keiei/saigai/110406.html

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