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Australia: Poor outlook for grain stokes fight over biofuels

FOOD producers who rely on feed grain stepped up their attack on biofuels yesterday as the forecast for Australia’s grain harvest was slashed by another 4.5 million tonnes after two more months of exceptionally warm, dry weather.

The dairy, pork, egg and feedlot beef sectors said the global demand for grain to produce ethanol was causing record grain prices, food inflation and job losses
With Australia so prone to drought, and climate change likely to lead to even more extremes of temperature and rainfall that would affect grain production, the groups demanded governments abandon any plans to mandate the use of biofuel.

In a special drought update yesterday, the Australian Bureau of Agricultural and Resource Economics cut its 2007-08 harvest estimate for the three main crops of wheat, barley and canola to 18 million tonnes, from the 32.9 million tonnes forecast in June and the 22.5 million forecast in September.

In NSW some areas experienced record dry weather in September and October. Many farmers have suffered total crop failure. The NSW harvest forecast of 2.4 million tonnes is now less than a quarter of what it was six months ago. It will be the state’s smallest crop in more than a decade.

The bureau’s report was released as a feed grain summit was held in Canberra. The price of wheat has more than doubled in the past year and is at record highs due to low global supplies.

Sydney Morning Herald (Australia)

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