Friday, November 10, 2023
Mackay and Whitsunday Life
The harvest should be winding up in the next few weeks. But it’s not.
It runs against sugarcane agronomy, and it runs against cane supply agreements.
Grower confidence is suffering under the influence of another long and arduous crush, potentially heading to a third consecutive year of harvesting into the Christmas curfew period, or at the least, cutting right up until Christmas.
It cuts against profitability, with a high likelihood of cane left in the paddock again as standover, with the sugar content of cane lowering after mid-November, and late-cut cane losing an important growth period so depleting the following year’s crop.
It comes down to some troubled mill performance. Very little time this year has been lost to wet weather, but we have seen quite a few breakdowns and below average throughput.
With current high prices and emerging new biocommodities markets for sugar and its bi-products, grower confidence by all rights should be at an all-time high. However, if milling to Christmas continues the industry will be on a downward spiral because growers don't see a future in growing a crop they can supply in a reasonable crushing timeframe. Even to not get the full potential of their crop.
A long season length dilutes that potential.
I’d go as far to say that the industry is burning cash. While some of Queensland’s millers have their act together, others need to spend the money, to invest as needed in capital works and maintenance that will keep the mills going. Our mills have for so long been unreliable and the reality is that this is cutting at the whole supply chain’s profitability.
For growers, we operate at the margins after taking a world price, and at the end of the day, growers - typically small agribusinesses- are wearing the cost. We wear the cost when the mill breaks down, we wear the costs of an unoccupied harvest labour workforce. And we wear the cost of productivity impacts.
We maintain a two-thirds interest in our sugar – the sugar made from our cane – it’s called Grower Economic Interest, or GEI. Millers, likewise, have a one third interest (MEI). It’s not a new approach, but it was further enshrined in the Sugar Industry Code of Conduct in 2017. It’s a vital industry tool that emerged from the fierce marketing debate that ensnared the sugar industry some eight years ago, and ensures clear lines of conduct and communication between marketers, millers, and growers. It was important at the time as it restored confidence for the regional grower families that are the very bedrock of Queensland’s sugar industry.
Without the Code of Conduct, large corporations with localized monopolies can have the upper hand in negotiations – even with strong advocacy bodies like CANEGROWERS at the negotiating table. The Code of Conduct has been a boon for industry, and has meant we get to continue to maintain the Australian way of doing business, on an equal footing.
We maintain that two-third GEI because we are the ones investing in crop cost of production, from soil heath to planting to environmental management to WHS to business costs to farm inputs to harvest costs. Because that's what we put in. It’s a shame not to be able to make the best of it.
The harvest will roll on well into December. Photo credit: CANEGROWERS Mackay