The global trend is of continuing improvement in wheat yields. This state of affairs implies that Australian wheat farmers can achieve a substantial yield improvement if they are able to reverse the causes of the declining yields and also catch up to the global improvement in wheat yields.
The negative impact of the trend of falling wheat yields can be seen by contrasting the situation with Australian cotton farming.
In 2011/12 Australian cotton farming occupied about 1 percent of the area devoted to wheat crops. It produced about 10 percent of the revenue obtained by wheat production.
Cotton farming has progressively improved yields and in 2011/12 achieved around 10 bails per hectare. This was achieved at a cost equal to the value of about 7 bails per hectare. Thus, cotton farming is profitable and becomes increasingly profitable while yields continue to improve. The high Australian dollar was not significant, with around 95 percent of the Australian cotton crop being exported.
With declining wheat yields, the tonnes of wheat that must be sold to cover the cost of production rises inexorably towards the revenue obtained from each hectare of production. Once the cost and revenue per hectare become equal, there is no reason to produce any wheat.
Links
High yielding crops from legume-dominant pastures, G.J. Scammell, Australian Agronomy Conference, 1998Australia’s declining crop yield trends I: Donald revisited, Andrew W. H. Lake, Australian Agronomy Conference, 2012
Australia’s declining crop yield trends II: The role of nitrogen nutrition, Andrew W. H. Lake, Australian Agronomy Conference, 2012
Australian Cotton Comparative Analysis - 2011 Crop, Cotton Research and Development Corporation, May 2012
@reddirt28 the crunch is just appearing. Returns are thin. Machinery costs will push Ag over the brink. Machinery 2x in 4 yrs@dyerjonathan
— Corey Blacksell (@coreyblacksell) February 16, 2013
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