Barley

GVP $647 million est. Down 33% year-on-year.
NSW achieved its third largest NSW barley crop on record.
Ongoing strong demand from the QLD-Northern NSW feedlot sector supported prices.

The 2022-23 season was another strong one for NSW barley producers. Despite a total decrease in the area planted and production, the NSW harvest was still the third largest NSW barley crop on record. Wet seasonal conditions prior to and during harvest, impacted yields and grain quality, particularly in southern and central growing regions. The major market driver was ongoing domestic feed demand and a tightly supplied global market. Whilst diplomatic tensions with China also continued to prevent Australian access to the high-value Chinese market for the 2022-23 year, tariffs were removed in August 2023.

Production

NSW Barley cropping area v production¹

Area Planted
Production (RHS)

Download data (.XLSX)

Despite a 36% year-on-year fall in production to 2.3 million tonnes, the NSW 2022-23 harvest was the third largest NSW barley crop on record, just behind the record highs of the 2020-21 and 2021-22 crops.¹ Strong global demand and historically high prices for other crops such as canola and wheat again came at the expense of barley, with estimated plantings down for a second consecutive year to 780,000 hectares.¹ Whilst the majority of the barley in NSW was planted into soils with high levels of moisture, for many producers, particularly in the southern and central cropping zones, the sowing season was marked by excessively wet conditions and torrential rain.⁷⁴ Repeated average to above average rain events during April and May created challenges with respect to seeding and re-seeding of washed-out crops.

Production prospects improved as the growing season progressed and mild spring conditions set up crops in most northern and western regions for another big harvest, with growers experiencing good yields and grain quality. Notably, growers in northern NSW managed to deliver an above-average portion of malting barley.⁷⁵ However, for growers in southern areas, it was a case of too much of a good thing. Heavy rain and widespread flooding during September and October took the shine off what should have been another bumper year and raised crop quality and yield concerns. Harvest was effectively an early and a late crop, with a "break in the middle to reflect the impact of rain mid-planting".¹¹⁹ Despite the wet conditions, state average yields were largely unaffected, approximately 26% above the 10-year average and reaching near record levels due to exceptional growing conditions in the areas not impacted by flooding and waterlogging.¹

Price

Barley prices were relatively flat year-on-year, generally trading within the $300 - $400/tonne range for most of the year.¹²² Domestically, the prospect of another big crop kept a lid on barley prices early in the year. Old-crop bids stagnated with local buyers well covered into the new crop harvest period and barley pricing fell back into the usual pattern of following wheat after trading independently throughout much of early 2022. Markets began to strengthen in September, with the wet weather adding a premium leading into harvest. Growing export demand also supported prices as tightening global coarse grain balance sheets forced northern hemisphere markets to fill growing gaps in supply.

Prices began to lift again during February 2023. Growing competition from another season of above average feed wheat production meant that some feedlot rations substituted barley for wheat.⁷⁶ However, barley supplies across northern NSW and Queensland tightened considerably, with Northern NSW stock in high demand, underpinned by the high logistical costs of transporting grain from the more southern regions. Industry reports indicated a $60-$80/t premium in this market over southern sources.⁷⁷

Feed barley prices¹²²

Port Kembla
Melbourne

Download data (.XLSX)

Trade and Macroeconomic Conditions

Australian Barley exports remained strong, falling 6% off the back of the record export volume and value achieved in 2021-22. However, NSW exports declined considerably, down 84% year-on-year to 115,773 tonnes and were valued at just over $54 million.³⁵ This fall in exports was in the wake of two exceptionally large cropping seasons, a sizeable exportable surplus, and greater domestic demand for barley for feed purposes. Saudi Arabia remained the major destination for NSW feed barley, with 60% by volume being shipped to the destination, followed by Japan and Taiwan.³⁵ Despite the dramatic decrease in the year-on-year volume of feed barley exports from NSW ports, NSW malt barley exports increased in-line with the greater proportion of total 2022-23 production.

Domestically, demand for feedgrains continued to strengthen. Solid global demand for Australian grain-fed beef and ample domestic supplies from recent bumper grain harvests, facilitated the continued expansion in the number of cattle in the key Queensland-Northern NSW feed market, which for some, feed barley remains the staple feed grain, despite trading at evens with wheat.⁸⁸ Consequently, alongside the strong national export program, barley stocks in Qld and northern NSW tightened significantly, boosting prices which lead to negative export margins, a function of the premium paid for feed barley over export parity.⁴²

Globally, feedgrain demand continued to rise and the global barley market remained tightly supplied. Global stocks at the end of 2022-23 were estimated at 19.2 million tonnes due to a 6.5% fall in global production, with production declines across all of the major global producers and exporters including the EU, Russia and Canada.¹²⁴ The ongoing Russian/Ukrainian conflict also continued to impact trade due to Russia blocking Ukrainian Black Sea ports and attacks on Ukrainian ports.

In April 2023, with a view to reopening the Chinese market to Australian barley for the first time in three years, Australia agreed to suspend its complaint to the WTO while China conducted an expedited review of the measures.¹⁰⁸ Then, in early August 2023, the Australian Government was notified that China would remove the 80.5% anti-dumping and countervailing duties on Australian barley. The tariffs, which were introduced in 2020, effectively shut down the Australian/Chinese barley trade overnight. Since then, the industry diversified, and assisted by successive bumper crops, Australia increased exports to the rest of the world. However, the loss of the lucrative Chinese market came at a cost. Approximately 65% of Australian barley exports over the 5-years prior to 2020 were to China, of which about 44% was malting quality, which commanded a premium price.³⁵ Australian exporters subsequently turned to other high value malt markets such as Mexico, Vietnam and Japan and whilst these markets are high value, they did match that lost from the Chinese market.

With the removal of the tariffs, Australian Barley farmers can now compete on a more level playing field with other producers in the global market. Whilst the removal of the anti-dumping and countervailing duties means that Australian barley can resume trade with China, it is unclear whether China will regain its previous market share. At the time of writing, the volume of barley that has been committed to Chinese importers since August 2023 is uncertain.

Outlook

Despite a 3% increase in area planted, NSW barley production is forecast to decrease 26% to 1.6 million tonnes, reflecting the formation of El Nino resulting in dryer conditions and below average available soil moisture throughout the growing season, particularly in central, eastern and northern NSW. Above-average temperatures during September resulted in an earlier commencement of harvest and early indications suggest that grain quality is excellent.¹⁰⁹

The re-entry of China into the Australian market has resulted in barley prices trending higher since the start of August and the ongoing dry conditions are likely to provide further support for domestic feedgrain prices moving into the new year. Global coarse grain prices are forecast to soften in response to rising global corn production although the global barley supply outlook remains tight, with reduced production expected across most of the top 5 global producers including the EU, Russia, Canada and Australia. Despite ongoing strong global demand, NSW barley exports are likely to decline in 2023-24, albeit from record levels. This fall will be driven by the forecast fall in production and softening export prices.

Stronger Primary Industries Strategy

Plant Regulation

Strategic Outcome

Sustainable Resources and Productive Landscapes

6.3 Regulate natural resource access now and for the future

Plantations are planted (by sowing seed or otherwise) trees and shrubs for timber and non-timber purposes including carbon sequestration. Plantation species can vary and include pine, eucalypts, cabinet timber species and other species. Depending on the species planted and the vegetation growing amongst the planted trees, the plantation can have the appearance of a native forest.

Plantations on farms provide an alternate or additional revenue stream to land managers through carbon projects, timber production or other uses such as bushfoods or tourism. Plantations can also improve natural resources and can deliver environmental outcomes including increased biodiversity, erosion control, carbon sequestration, salinity management and other landscape benefits. Plantations also provide a critical sustainable and renewable timber resource to the community for essential products such as house frames, flooring, furniture, paper, poles and packaging.

Plantations are regulated under the Plantations and Reafforestation Act 1999 (the Plantations Act). The Plantations Act provides an integrated process for plantation authorisations. Key objects of the Plantations Act are to facilitate reafforestation and to promote and facilitate the development timber plantations on essentially cleated land. The Act is supported by the Plantations and Reafforestation (Code) Regulation 2001 which provides the minimum environmental standards required for all authorised plantations. The Department of Primary Industries (DPI) is responsible for regulating plantations on public and private land under the Plantations Act and Code. DPI assists farmers and corporate entities to make practical decisions based on the best scientific information available and assists plantation owners and managers to comply with the Act.

A review of the Plantations Act and Code was completed and published on the DPI website in December 2022. The purpose of the review was to assess the continued relevance of and need for the Plantations Act and Code, and if it were to remain in effect, determine if any changes should be made to strengthen its currency and value. The outcomes of the Review indicated that the Plantations Act and Code remain as important today as when they were first introduced. This is reflected in the Review’s recommendations to retain the Plantations Act’s objectives as well as provisions around the process for authorising plantations, and the powers to cancel the authorised status of a plantation. Many of the Review recommendations are underway including the establishment of a Reference Group to review the fire provisions of the Code. There are more than 1,700 authorised plantations in NSW, with a combined plantable area of approximately 450,000 hectares and retained native vegetation area of approximately 40,000 hectares. DPI continues to implement the Plantation Act and Code to ensure plantations are established and managed to environmental standards and to facilitate development of new plantations providing carbon sequestration, biodiversity outcomes and a renewable timber resource.