Autumn Newsletter 2015

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1 Table of Contents Welcome... 1 News Events... 4 Editorials... 5 West Midlands Group is proudly sponsored by: 2015 Diamond Partners Autumn Newsletter 2015 Hope you had an enjoyable Easter and had a nice break before the mad seeding season begins. Seeding is no doubt just be around the corner with all this rain. Hope it is wet on your patch of dirt! At the WMG AGM in March, two new board members were elected; Mark Keene and David Fox. Welcome and we look forward to your ideas and involvement. Thank you to retiring board members Keiran Sullivan and Helen Lethlean for their wonderful contributions on the WMG Board. Enjoy our latest newsletter! Anne Wilkins Executive Officer 2015 Gold 2015 Silver 2015 Bronze Partners 1

2 News The WMG Pick of the Crop award 2014 was presented to Graham White at the WMG Crop Updates. Graham helps the WMG a great deal with the Badgingarra Research Station. The award is in acknowledgement and appreciation of Graham s effort; thanks you Graham! The WMG main trial site 2015 at Kyanaba, Dandaragan is full swing. There will be a wide array of interesting, innovative trials to see this year so stay tuned. Thank yo again to the Roberts family for hosting the trials on their property this year Is soil compaction an issue for your farm? Calling all farmers! WMG are encouraging you to opportunistically rip or deep cultivate strips across or around cropping paddocks prior to the coming season to test the severity of compaction pans. GRDC is providing funding to the WMG to develop farmer based diagnostic tools for determining soil compaction across the paddock. The WMG are also very appreciative of three new Bronze sponsors; Pacific Seeds, Pacer Legal and Jurien Lime Sands. Thank you for your support and we look forward to working together in future. The WMG also have some new members: Michael O Callaghan, Graham Bookham and Jim Motter; welcome aboard. Another achievement in March was that WMG was successful in receiving GRDC funding for a project to develop farmer based diagnostic tools for determining soil compaction across the paddock. The project will establish protocols for farmers to test their paddocks for the severity of compaction pans across variable soil types and production zones within those paddocks. Ten growers will opportunistically rip or deep cultivate strips across (or around) cropping paddocks prior to the 2015 growing season. Crop growth responses across the various production zones and soil types within paddocks will be monitored. Interpreting the responses on the ripping/deep cultivation strips will be addressed using simulation modelling. There will also be a biological explanation of the responses and an economic interpretation of what those responses mean in dollar terms. Dr Bill Bowden, WMG Ambassador said the objective is to give growers the opportunity to explore which agronomic management practices best suit their particular situation and to relate subsoil constraint literature to the range of outcomes likely for their particular farming system. This will establish protocols for farmers to test their paddocks for the severity of compaction pans across variable soil types and production zones within those paddocks. Ten to twelve selected/volunteer growers are opportunistically rip or deep cultivate strips across (or around) cropping paddocks prior to the 2015 growing season. Crop growth responses across the various production zones and soil types within paddocks will be monitored. Interpreting the responses on the ripping/deep cultivation strips will be addressed using simulation modelling. There will also be a biological explanation of the responses and an economic interpretation of what those responses mean in dollar terms. The results of this project will be presented during the WMG s Spring Field Day 2015 and included in the WMG Research Annual 2016 which is available to all WMG members. 1

3 Providing growers with the tools to tackle nonwetting soil Non wetting soil has been recognised by local growers as the biggest soil constraint to increasing productivity in the west midlands region. It significantly reduces crop and pasture productivity by preventing water and nutrient uptake, resulting in poor plant establishment and the increased risk of wind erosion. Some of the outcomes of the project are for growers and agri-industry to have improved knowledge to confidently select agronomic strategies and options for water repellent soils. Guidelines will be developed to aid the decision making process as to which option to choose from for their farming system. Two regionally based graduates will be employed along with three PhD candidates and a postdoctoral research fellow. Graduates will undertake research, development and extension activities on soil water repellence as well as other soil constraints such as subsoil acidity and compaction in WA cropping soils. For further information about the project, please contact Dr Stephen Davies, DAFWA on mob: WMG 2014 Annual report This is now available on the WMG website: Nearly 3.3 million hectares of Western Australia's agricultural soils are either affected by or at high risk of soil water repellence. A further 6.9 million hectares is at moderate risk. Estimates by the Department of Agriculture and Food WA (DAFWA) suggest the opportunity cost from lost production due to water repellence is in the order of $ million per annum. Dr Stephen Davies, DAFWA stated that with the capacity to employ staff, we will be able to further build upon soil research and understand soil water repellence across a range of different soil types providing benefits across the State. Working in partnership with the WMG and the other grower groups, we will be able to establish on-farm trials and demos with grower. To address this issue, the Grains Research and Development Corporation (GRDC) has granted funding for a five year project to DAFWA to work in partnership with the West Midlands Group (WMG), Murdoch University and the CSIRO to continue researching methods to mitigate non-wetting soils. The objective of the project is to provide growers access to options to be able to confidently select and implement appropriate soil water repellence management techniques for their particular soil type, need and budget. 2

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5 Aluminium Editorials What have soil tests told us this year? Every year Summit Fertilizers receive thousands of soil samples from across the state. These are always discussed at an individual level with farmers. However there is always some interesting patterns thrown up if we look at the data across a region. Until mid-march from the West Midlands region (Moora, Dandaragan & Gingin shires) Summit has processed about 1200 soil samples. Some interesting facts have come out of this data. The main three nutrients to examine are phosphorus (P), potassium (K) and ph. What have soil tests told us this year about ph? Soil ph has been the hot topic around Western Australia for a number of years. DAFWA have expended considerable resources looking at rates, timing and incorporation of lime and have come up with some critical values for soil ph. Simply put, top soil ph should be kept above 5.5 (in CaCl 2) and subsoils above 4.8. In the West Midlands we found that 67% of topsoil samples have fallen below 5.5 and 63% of subsoil samples have fallen below 4.8 as shown by the two pie graphs below. ph Levels - Topsoils West Midlands 5% ph Levels - Subsoils West Midlands 33% 25% 24% 13% 14% 37% 49% < >5.5 < > ph x Aluminium Subsoils ph The graph above shows the effect of declining soil ph on the levels of aluminium. In the graph it is shown that a soil ph above 4.8 rarely shows Aluminium levels above the critical level of 5. The recommendation of maintaining topsoils above 5.5, however, is to allow the lime to trickle down into the subsoil to affect that layer also. 4

6 With lower ph there can be resultant higher levels of aluminium which can lead to stunted roots, reducing the plants ability to access nutrients and water. Aluminium levels above 5 can be a problem although barley, canola and sub clovers can be more sensitive than wheat and oats. What have soil tests told us this year about potassium? Potassium is a nutrient that can be hard to define, as far as responses go. Some of our soils are deeper sands and hold a limited amount of potassium at depth. Duplex or loamy soils have more potassium at depth within the root zone of most of our crops. Some crops, such as canola and lupins are better able to extract potassium from the soil than, say, wheat or clover. Potassium Levels - Topsoils West Midlands 26% 13% Potassium Levels - Subsoils West Midlands 6% 4% 3% 13% 30% 34% 53% 18% < >160 < >160 There was 13% of top soil samples below 40 mg/kg and 53% in the subsoils. Another 30% of topsoils are below 80 and 34% of subsoils. 80 mg/kg is about where cereals stop responding to K and for canola and lupins it is about 40 mg/kg. Some clovers in high rainfall areas (e.g. Balansa) may respond up to 150 mg/kg in a soil test. These numbers and responses can be a bit rubbery, so reference to your own soil test data is recommended. Sub soil samples down to 30cm is recommended to understand the potassium available at depth. What have soil tests told us this year about phosphorus? Phosphorus Levels West Midlands 13% 6% 24% 36% 21% < >50 Phosphorus is the driver of crop growth in Western Australia. Low plant available P reduces growth of young tissue - including roots - which reduces the plants ability to explore as large a volume of soil as usual. In turn it can t access water or other nutrients. One major issue with phosphorus is that there is no practical way of topping up levels after the crop has germinated, so you need to get it right at the start. Critical values for P are hard to define without overlaying soil type, rainfall and intended enterprise details on the data. Roughly speaking, from this data, 30% of soil P levels are low this year. 13% are extremely high and a further 36% are high. Some of the low levels may be deeper sands where it is difficult build P levels a desirable level may be nearer to 12 or 15 than 20. For more information on soil test results speak with your Summit Area Manager, Brett Beard, Moora , or Juliet McDonald, Coorow

7 Grain marketing update Welcome to the first Ten Tigers Grain Marketing update for the West Midlands Group is shaping up to be average at the moment with no real clear indications that large prices will be achieved. We are currently hovering just above the 50 th percentile pricing for Kwinana wheat. Sure there is room to go up in pricing but current indicators point more to the down side. The chart below shows how current prices compare to percentiles and also to last year s best cash prices. Be prepared for the movement in prices and be ready to capture opportunities should they arrive. There are limited pricing opportunities each season and we want you to get the best return for your business. Movement in prices can be quick and remember that it is not always upwards so you need to have a plan in place to avoid selling at the lows. Weather concerns will most likely dominate for the next few months as northern hemisphere crops are planted or harvested. Market reports (i.e. USDA stocks & acreage Mar 31 st ) will also be important to watch. This will create opportunities in pricing as the market reacts to these reports. Ten Tigers provides independent grain marketing advice and solutions to growers throughout WA. We do not receive any commission from third parties. Our focus is solely on making money for growers. A variety of grain marketing packages are available to suit any business. DISCLAIMER: Any views expressed in this article are those of Ten Tigers. The information and opinions within this material are of general nature only and do not take into account the particular needs or individual circumstances of investors. The material does not constitute any investment recommendation or advice nor does it constitute legal or taxation advice. Ten Tigers Pty Ltd - trustee for CJ & KA Tonkin Trust t/as Ten Tigers (ABN ) does not give any warranty, whether express or implied, as to the accuracy, reliability or otherwise of the information. Authorisation for derivatives advice (futures and foreign exchange) held by: Chris Tonkin, Authorised Representative No with Australian Financial Services License No held by Ten Tigers Grain Marketing Pty Ltd. (ABN ). Ten Tigers Pty Ltd is the Corporate Authorised Representative (CAR No ) of the Licensee. 6

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9 UNDERSTANDING THE FIGURES FOR YOUR FARM PROFIT & LOSS AND THE BALANCE SHEET To be viable your farm business needs to be profitable enough to fund the demands on the business. These are (i) private drawings (money you take for your own use), (ii) re investment (iii) repayment of borrowing and (iv) tax. You can use farm accounts to check how viable your farm is. These are the three important ingredients in a farm business: Cash to pay the bills for materials and services that are transformed into saleable products. A business that runs out of cash to pay bills will quickly be in trouble. Your bank statements show you how cash flows in and out of the business during the financial year. Profit is the amount of yearly sales and receipts less costs. It is usually shown as net profit in farm accounts. Gross profit is also sometimes shown but this is before costs such as labour, machinery (including depreciation) and input costs have been taken off. Essentially, net profit is what is left to pay for personal drawings, tax and loan repayments. Your profit and loss account shows you the net profit (or profit ) made from trading activities over the financial year. Capital is the money invested in the business. Some capital will belong to the owner and some may be borrowed from outside the business. Your balance sheet shows the capital position (i.e. assets less liabilities) of your business at one point in time, the last day of the financial year; 30 th June. The trading performance of the business over the year is measured by the net profit. Net profit or profit is concerned solely with items of income and expenditure, including depreciation, arising from the trading activities of the business, for example, selling wheat, buying fertiliser and so on. The net profit needs to be sufficient to pay for personal drawings, chattel mortgages, tax and loan repayments. If your figure comes out as negative it is not necessarily a cause for concern. This is merely a first estimate to indicate how the demands on your profit compare with the profit itself. There can be many reasons why the figure might come out as negative in any one year; however you do not want this to become a regular trend. Where the demands (i.e. the sum of drawings, loan repayments, tax and reinvestment) repeatedly exceed the profit before depreciation, the business is really living off capital and is unsustainable in the long term. If your business is making insufficient profits, you can improve them by assessing what enterprises you carry out. It may be useful to consider possible new roles and activities; share farming; contracting etc. The balance sheet is vital for the owner of a business. It deals with the capital (all the money) invested in the business at one particular point in time, usually the last day of the financial year. It is made up of two lists one showing the value of all the possessions (assets) in the business, and the other detailing the associated debts (liabilities). The owner s investment or stake in the business is called the net worth (or net capital or owner equity). Net worth is the amount left if all the assets are sold and all debts are repaid at the balance sheet values. The balance sheet can be easily used to assess the long-term (overall) stability of the business. The profit and loss and the balance sheet also gives' you the basis for looking at different ratios and benchmarking to review how you are travelling. The banks look at different ratios when assessing your annual review the liquidity ratio; equity ratio; peak debt to gross receipts and interest cover ratio talk to your bank; farm consultant or accountant to relate these ratios to your farm business. For further information contact Judy Snell at RMS Bird Cameron Moora 8

10 Boosting surveillance to protect livestock industry The Department of Agriculture and Food has launched a pilot program to boost surveillance and testing for exotic animal diseases in Western Australia. The Subsidised Disease Investigation Pilot Program aims to increase WA s surveillance for early detection of exotic animal diseases, such as foot-and-mouth disease and classical swine fever. The pilot is part of the $20 million Boosting Biosecurity Defences program made possible by Royalties for Regions. Department Early Detection of Emergency Animal Diseases project manager Katie Webb said the earlier a disease was detected, the better chance of eradicating or controlling it. Early detection helps to minimise the economic and social impacts of a disease on the livestock industry and wider community, Dr Webb said. Surveillance testing is also an essential part of proving that WA does not have certain diseases and this ensures our ongoing access to key overseas markets. Department veterinarian and pilot program coordinator Kevin Hepworth said the program would subsidise the cost to livestock producers of investigating disease in their sheep flock and goat, cattle or pig herds in cases where the animals showed signs similar to exotic or emergency animal diseases. Under the program, the producer will be granted a $300 subsidy for veterinary costs associated with disease investigations and a discount on veterinarian travel to the property, Dr Hepworth said. Livestock producers can choose to use a participating private veterinarian or a department veterinary officer. There is also a subsidy for laboratory fees for tests conducted by the department s Animal Health Laboratories to rule out relevant exotic diseases and help establish a diagnosis. Dr Hepworth said thorough disease investigations support WA s livestock industries by helping to ensure the early detection of an emergency animal disease and providing evidence of Australia s freedom from trade-sensitive diseases. Disease investigations also enable producers to determine the cause of stock disease on-farm and put control measures in place to minimise losses, he said. The pilot program is expected to help producers build a stronger relationship with their local veterinarian and promote the value of veterinary investigations. More information on the Subsidised Disease Investigation Pilot Program is available on the department website agric.wa.gov.au by searching for disease investigation pilot or by contacting your local department veterinary officer. 9

11 Producers reminded to check buyer and processor NVD requirements before loading Western Australian livestock producers are reminded to check buyers and processors National Vendor Declaration (NVD) requirements before loading stock. Department Animal Product Integrity manager Peter Gray said the Livestock Production Assurance (LPA) NVD was an industry-driven initiative which assured Australia s domestic and export markets of the safety of Australian beef, lamb and goat meat. NVDs are regularly updated to reflect changes in the information requirements of local and international buyers of livestock and regulatory authorities, Dr Gray said. Like other quality assurance programs, the most up-to-date NVDs should be used as older versions may not contain sufficient information to meet export market requirements. Market demands are driving the decision by livestock buyers to only accept the most recent versions of NVDs. Producers should contact their livestock buyer or meat processor to check which version of the NVD form they are accepting before loading livestock onto the truck. Dr Gray said the department supported industry s move to only accept the most current NVD forms as WA s reputation as a provider of safe, residue-free meat and meat products relied on its ability to provide the most up-to-date and correct information on our livestock. Producers are also reminded that Western Australian regulations also require the property identification code (PIC) of destination to be included on the NVD, Dr Gray said. To obtain the most current version of the NVD form, contact LPA on or go to their website at NVDs are now also available in an electronic version (edec) from the LPA website. 10

12 Research delivers opportunities to cut canola production costs There has been a breakthrough for canola growers looking to minimise the cost of treating the potentially devastating fungal disease sclerotinia stem rot. Sclerotinia stem rot cost Western Australian growers an estimated $23 million in lost yields last year in what was only an average disease season. Crucial information about the precise weather conditions required to encourage the development of spores and subsequent triggers for disease infection was presented yesterday (25 Feb) to the 2015 WA Agribusiness Crop Updates. Department of Agriculture and Food canola pathologist Ravjit Khangura said the information could help reduce canola growers fungicide expenses. Dr Khangura said knowing the likelihood and severity of disease epidemics would save growers from unnecessary spray treatments. Data from five seasons from has shown that 40 millimetres of rainfall or more in the lead up to flowering and a humidity level of more than 75 per cent is required to induce spore set, she said. However, the disease will not manifest unless there is another 40 mm of rain in the following two to three weeks, with the same humidity level of 75 per cent or above. The disease could still develop if the conditions are less than ideal but will not be yield limiting. These newly quantified triggers of canola sclerotinia stem infection are the result of research combining disease biology with modelling to develop decision support tools to assist growers in more profitable canola production. This research is supported by the Grains Research and Development Corporation (GRDC). Dr Khangura said spraying for sclerotinia was expensive, so growers could save money by refining their treatment program by applying this new information when making decisions about whether to spray or not and when. For example, if there is a wet start to the season and spore production occurs and if conditions become less favourable (drier) at the time of flowering then growers may not need to treat at all, she said. However if wet and humid conditions prevail, especially at the time of flowering, the disease may be prevalent and spraying will be necessary. But if the forecast is for dry conditions at a particular bloom stage, growers may not have to do a second treatment. Dr Khangura said the development of a decision support tool could also incorporate other variables such as canopy density to enhance predictive capability. The department, supported by the GRDC, has conducted extensive work on sclerotinia stem rot in recent years, to assist growers to minimise the impact of this sometimes devastating crop disease. We now have effective treatments, we know how to use them and now we have the information available to refine the time of application to ensure the investment is worth it, Dr Khangura said. We also have a suite of tools to determine the risk, like knowing the paddock history, history of surrounding paddocks and weather conditions that must coincide with presence of sufficient inoculum for sclerotinia stem rot to become a problem in canola. The research will continue this season in the northern and southern regions. 11