22 December 2010:  2010 Sugar shaker - sweet and sour

It has been a tough year for sugarcane growers with record sugar prices but profitability washed away by extraordinary prolonged rainfall.  Despite the terrible conditions being experienced this year with wet weather, growers continue to look forward with resilient optimism to improving farm management practices, productivity, delivering on research capacity and getting some long awaited recognition for the enormous changes they have implemented on-farm over the past decades.

RECORD SUGAR PRICES:  Growers started the year on a sugar high, more buoyant about the industry than they had been in decades, as sugar prices spiked to 30 year highs. Whilst prices came off those highs, the shocking weather being experienced – with droughts to floods in sugar producing regions across the world – looks set to potentially keep prices at these higher levels, at least in the short term.

THE BIG WET SEVERELY DAMPENS PRODUCTION:  The Australian sugar rush was short-lived, as torrential downpours on the eastern-seaboard washed away hopes of a record season and has continued to cause adversity in the field.  Extraordinary rainfall kept the sugar content in the cane low, making it less profitable to mill.  Boggy fields kept heavy harvest machinery from being able to bring in the crop, leaving up to 18% of the crop unharvested, left to standover until next season.  Adding insult to injury, wet paddocks left growers unable to replant next season’s quota, which together from fields damaged by heavy machinery trying to salvage cane wherever possible this season, and the lower profitability from standover cane, will see a continued dampening of productivity and profitability in 2011.

Australia-wide we are looking at well over 5 million tonnes of unharvested cane equating to around $320 million in losses to the sugarcane industry, which when looking at the flow-on effects (lower spending etc) in the local communities, equates to up to a $800 million estimated losses to the economy.

BUT INVESTORS BACK A BRIGHT FUTURE FOR AUSSIE SUGAR:  The huge investment being made in the Australian sugarcane industry is a sign that large, commercial players see a bright future for our industry. Just months after Maryborough Sugar Factory took on Queensland’s far northern mills, Singaporean agribusiness giant, Wilmar, made an offer on CSR’s sugar division, Sucrogen. CANEGROWERS was consulted by Wilmar and the Foreign Investment Review Board during the investigatory process, and this week bought news that the sale is now full- steam ahead. MeanwhileMitr Phol from Thailand has taken a strategic stake in Maryborough Sugar Factory and further movement is expected.

ON THE GLOBAL STAGE: Strong Australian involvement on the sugar world stage has been key to developing the strength and respect we now enjoy internationally.  These relationships and the knowledge sharing which occurs though the many alliances forged by CANEGROWERS will continue to be a force that helps drive the future of our industry.  This year, CANEGROWERS Chairman, Alf Cristaudo, completed his final year of a three year term as President of the World Association of Beet and Cane Growers (WABCG).  The Presidency alternates between cane and beet every three years, and he handed over the presidential boots to British counterpart, William Martin, who is the current Chairman of the UK National Farmers’ Union Sugar sector. He said serving the international sugar industry has been a real honour.

ON THE HOME FRONT > HUGE LOBBYING WINS:  CANEGROWERS focus for the coming year will remain on the multitude of issues facing cane growers currently.  This year saw some huge lobbying wins.

Scaled back regulatory requirements:  CANEGROWERS was heavily involved in moderating the Queensland Government’s unworkable approach to regulating the cane sector with reef regulations, influencing to make them more reasonable and practical. CANEGROWERS was able to achieve a 5 metre buffer for chemicals as an alternative to the 20 meter buffer for regulated chemicals which would have reduced some farmers’ arable land by up to 40%.  CANEGROWERS introduced a chemical record- keeping book, helping growers to more easily meet the scaled-up record keeping demands. But one of the biggest wins as far as growers were concerned, was CANEGROWERS practical influence on the Environmental Reef Management Plan document, to simplify what was an unduly onerous and complex process. CANEGROWERS successfully pushed for trials to review the Queensland Government’s method of determining appropriate rates.  It also successfully challenged the unworkable method to determining the optimum amount of fertiliser and was able to achieve a number of amendments to the regulation.  CANEGROWERS procured $800,000 in industry support funding to assist growers in meeting the requirements of the reef regulations.

Water pricing imposts on growers revoked:  After months of intense lobbying by CANEGROWERS and irrigators, the Queensland Government has made the sensible decision to withdraw from imposing huge and largely unjustified increases of up to 400% to rural irrigators’ water bills. The government’s proposed water pricing increases, such as the rate of return sought for dams built decades ago, would have left some farm businesses unprofitable, and CANEGROWERS praised the Minister for Natural Resources, Mines and Energy, Stephen Robertson, for responding to the concerns raised by CANEGROWERS, and praised his resolution to withdraw from imposing these price hikes.

Rats Species Management Plan:  The first of its kind, an agreement between CANEGROWERS, BSES Limited, Productivity Boards and DERM to manage rats in sugarcane, has streamlined the permit system and reporting of baiting and provides a longer baiting window for the grower. This is particularly significant given the seasonal conditions and standover cane.

Carbon trading:  As a result of the presentation of detailed analysis and lobbying from the National Farmers’ Federation (NFF) and CANEGROWERS, the federal government determined to exclude the agriculture sector from the proposed ETS.  The scheme was subsequently shelved, but the analysis undertaken will be required when the scheme is revived.

State land rental:  CANEGROWERS was part of a movement which successfully lobbied the Queensland Government to reduce the proposed new minimum fees for state land rentals by 50%.

Flotation tyres:  CANEGROWERS lobbied to obtain 2-year extensions to permits allowing use of current tyres. In addition, the first of new speed compliant tyres were delivered to CANEGROWERS Transport Committee member Gary Stockham as part of the trial project with Alliance Tyres.

UD Licence: CANEGROWERS successfully maintained the special purpose vehicle (UD) licence to allow harvesters and haulout machines to be driven on the road without having to wait three or more years to obtain a heavy vehicle licence.

THE INFORMATION AGE:  CANEGROWERS has ramped up information networks across the board – from market information to growers, to the introduction of social media for stakeholders and media.

Grower pricing: This year saw the announcement of the CANEGROWERS Market Information Service, a significant new offering to our members.  To assist growers to make informed decisions on futures pricing, CANEGROWERS has contracted three sources of information.  On a quarterly basis, LMC International updates its model predicting future price movements, Czarnikow Ltd provide a special fortnightly analysis and ASMC supply subscribing members with a daily market update – In the Raw. 

Best Management Practice (BMP): This year CANEGROWERS made several DVDs showing growers on farm talking about how they implemented BMP which growers loved as an addition to the written case studies they already receive in their fortnightly Australian Canegrower magazine. This resource went hand in hand with the BMP 6-booklet series of which the final booklet was sent to all members during the year.

Social media helps gets message beyond farm gate: Better information flow to the community, the government and the media was ramped up this year.  CANEGROWERS added FaceBook, Twitter and an enhanced website to its information delivery systems.

PUTTING PRESSURE ON SKYROCKETING INPUT COSTS:  At the farm gate, the future is not only focussed on increasing productivity, but putting the screws on the price hikes in the inputs which are needed to run a farming business.  From labour, to fuel, to water, to transport, to fertiliser - just to name a few - as an industry, we need to really come up with clever strategies to keep a lid on input costs.  CANEGROWERS’ response to skyrocketing fertiliser prices encompassed submissions to government inquiries, examining direct imports options, and the bedding down of the strategic alliance which is helping to bring transparency and competition to the market.  The presence of Ravensdown, a company based on values similar to our own as a grower- owned business, is expected to make a long term difference, and is an excellent example of where CANEGROWERS has taken a difficult but necessary step to secure the strategic foundations of the industry. More clever ‘Ravensdown fertiliser’ type schemes are the order of the day for CANEGROWERS, who is actively looking into a range of parterships to achieve real savings and improve the bottom line of its grower members.

RESTRUCTURE STEADIES:  Rationalisation and restructure has seen the number of cane growers drop by 40% in the past decade.  The remaining 4000 cane farming businesses are farming an area which has only dropped by 20% in that same time.  They use the latest technology and research findings to increase their productivity, profitability and sustainability.  Cane growers have been at the forefront of the wave of change needed to stay ahead of the game to date - and want to stay that way.

CHANGING HEADS > BOARD: This year has seen an injection of new blood onto the CANEGROWERS Board, as the triennial elections delivered an array of existing and new representatives into the variety of local and State Board positions available within the CANEGROWERS structure.  Renewal of the Board is an important process.  It is about the right balance of enthusiasm and new ideas mixed in with the proud history, tradition and performance, which has really underpinned CANEGROWERS establishment of itself as one of the strongest agricultural representative organisations in Australia, indeed, the world.

CHANGING FACES > CEO:  On the home front, after nearly 20 years heading up CANEGROWERS, we have said goodbye to CEO Ian Ballantyne.  Ian’s tenure has left its mark. His enormously positive contribution has been widely recognised by the organisation, and indeed the industry, and he was officially commend him for his contributions.  CANEGROWERS’ new CEO, Steve Greenwood, took the chair on 30 August 2010, staking his intention early to build on the solid foundations of the strong agri-political body. Strong foundations are something Steve knows a lot about – his most recent position heading up the Queensland division of the Property Council of Australia (PCA). 

RESEARCH REVIEW STARTED:  The industry has seen the opportunity for a rejuvenation of its research and development function.  This year it funded a large-scale project to find the best research, development and extension directions for the future of our sugarcane industry.  It is anticipated that the initial findings will be released early in 2011 and these will be verified, strategised and rolled out by 2012.  Australia wants to continue to lead the charge in sugar production on the world stage - and this will help give us the tools and direction to do just that. 

CANEGROWERS has taken a lead role in ensuring that our industry research, development and extension (RD&E) efforts continue to deliver benefits by working with BSES Limited and ASMC to complete a full review of BSES and industry research structures; and to address BSES’ severe funding shortfalls in delivering existing services to the industry and funding a GM joint venture with Dupont. These efforts will deliver outcomes over the next two seasons.

The next few years will be critical to strengthening both our industry and our place within a strong, internationally recognised Australian agricultural sector.  We need to capitalise on favourable market price opportunities and back ourselves by ensuring that a strong research and development function is in place, so that in another 10 years we are still held up internationally as front-runners in agriculture.

TELLING THE STORY OF SUGARCANE:  Sugarcane has a bright future.  Let’s face it, cane has come under the microscope over the past two decades, and our progressive and resilient growers have risen to the challenge.  Growers are by their very nature laid back - they just get in and do what needs to be done – but they don’t tend to get out and tell their story.  CANEGROWERS is always being asked about the industry from schools, tourist centres and the general community. In the coming year it will work on telling the story of cane to our local communities, to our schools and to our urban dwelling neighbours. We are part of a leaner, greener and iconic Australian industry. We need to stand up and show just how far we’ve come - and just as importantly - where we are going. Check out the quirky make a movie competition www.canegrowers.com.au/thecanetube and our new schools materialwww.canegrowers.com.au/kids for our first steps in that direction.

Media Comment:  
Steve Greenwood, CANEGROWERS CEO, 0488 721 156.  
Alf Cristaudo, CANEGROWERS Chairman, 0418 181 204.