GrainGrowers convened industry leaders from the finance, freight and supply chain sectors for two separate roundtables last week to examine the immediate and longer-term impacts of the Middle East conflict on Australian growers.
Since February, Australian growers have faced sky-rocketing costs and constrained access to fuel and fertiliser, placing significant pressure on cash flow and influencing decisions about this year’s growing season.
GrainGrowers CEO Shona Gawel said the roundtables were designed to bring together critical parts of the value chain to better understand the challenges facing growers and identify potential measures to relieve the pressure.
“We are hoping for a swift and peaceful resolution to the war in the Middle East, but we also know the impacts on growers will continue to be felt well beyond the re-opening of the Strait,” Ms Gawel said.
“Complex challenges rarely have simple solutions. By bringing together stakeholders from across the grain supply chain, the roundtables provided the opportunity to identify practical actions to strengthen the resilience of Australia's grain industry.”
Finance Roundtable:
The finance roundtable, attended by major lenders, investors and grower stakeholders, highlighted that growers are operating in a fundamentally different risk environment.
Participants noted a shift away from seasonal volatility to geopolitical and market driven risks, increasing uncertainty and placing greater focus on cash flow resilience and risk informed planning.
Surging input costs and softer commodity prices are squeezing margins and driving up working capital needs, leaving growers under mounting liquidity pressure.
Banks and investors indicated that they are adapting to this environment by placing a stronger focus on forward projections, sensitivity analysis and borrower preparedness, with an increased expectation that growers demonstrate clear business strategies and risk management approaches.
The discussion highlighted structural pressures, from rising land values to slowing productivity, signalling a shift to a more constrained and risk focussed operating environment.
“At a time when margins are tightening and risks are becoming more complex, ensuring growers have access to appropriate finance will be critical to supporting grain production and regional communities” Ms Gawel said.
Freight and Supply Chain Roundtable:
A Friday’s Freight and Supply Chain Roundtable, GrainGrowers brought together representatives from across the grain supply chain and government to discuss opportunities to strengthen the resilience and efficiency of Australia's grain freight network.
Discussions focused on seasonal freight demands, regional transport challenges, supply chain efficiency and practical measures to support the continued movement of grain from farm to domestic and export markets.
The discussions come as RaboResearch forecast an eight percent drop in total Australian winter cropping area this season, reflecting the combined impact of global instability and ongoing dry conditions.
“These are some of the most challenging conditions growers have faced in many years,” Ms Gawel said.
“The media and policy spotlight has firmly been on agriculture the past few months with the conflict in the Middle East driving up the cost of farming.
“The insights from the roundtables will inform GrainGrowers’ ongoing advocacy to ensure growers needs are front and centre.”