Department of Primary Industries

Dry Seasonal Conditions in Rural Victoria

Report: 47 June 9, 2005

Some areas of the Mallee have good stored soil moisture. The early emergence of this dry sown wheat is cause for cheer. (May 2005) Source: E. Ryan

Environmental Indicators

Rainfall May 2005 was exceptionally warm and dry across Victoria, with the State experiencing its driest May in at least 70 years. All districts except East Gippsland are decile 1. Mean maximum temperatures across the state were 1 to 3°C above average and the minimums were 3 to 6°C above average across most of Victoria. This autumn was the driest on record for much of Victoria and drier than average across most of Australia with the exception of Western Australia and some parts of Queensland. The Bureau of Meteorology’s 36-month decile map shows the consistency of the dry conditions over the last 3-years. The chance of an El Niño event occurring this year is still assessed at between 30 and 50%. The Southern Oscillation Index for the end of May was –14.5. Minimal rain had fallen to 9am Wednesday June 8th (Figure 1), although there were falls up to 15 mm across North and Central Victoria on Wednesday night. A much anticipated low pressure system will move across Victoria over the next few days.

DSC Report 1 Figure 1. Victorian Rainfall 1st to 8th June 2005

National Climate Centre Bureau of Meteorology

Water storages GWM Water will commence the winter channel run to fill dams in the Wimmera and Southern Mallee this weekend. The winter run continues until October and will fill one dam per 400 ha of property, the same as for 2004. Water for these areas is supplied only once a year so customers will need to use their restricted supply efficiently. The Tungamah pipeline project was launched on June 7th to replace the existing inefficient domestic and stock channel system delivering water to Tungamah in North East Victoria. The pipeline will save 4,800 ML currently diverted from the Broken River and supply 50% of the savings needed to decommission Lake Mokoan. The project will commence later this year and be completed in time for the 2007/08 season. The Eastern Irrigation Scheme to deliver about 5,000 million litres of Class A recycled water each year to the Cranbourne-Five Ways area for the irrigation of market gardens, golf courses and Cranbourne racecourse was launched on May 31st. Over 70 vegetable growers in the Werribee Irrigation District commenced using recycled water from the Western Treatment Plant earlier this year. Currently 4,100 million litres are being used with 8,500 million litres the target.

Storage Change in Capacity Storage Change in Capacity last 3 weeks 6/6/05 last 3 weeks 6/6/05 Goulburn Basin 0% 26% Thomson/ LaTrobe Basin -2% 50% Broken Basin -1% 28% Werribee Basin -2% 33% Campaspe Basin 0% 10% Glenelg/ Wimmera Basin -1% 10% Loddon Basin -2% 27% Maribyrnong 0% 14% Upper Murray Basin 2% 36% Barwon Storage -2% 57% Ovens Basin -11% 28% Source: http://www.fishvictoria.com/pnews/water_levels.php Fire Dry conditions are persisting and consequently fires are continuing to occur. There have been 628 wild fires that have burnt 32,839 ha for the fire season. The number is slightly ahead of the 30-year average. Fuel reduction burning is tapering off as conditions become too moist, particularly at higher elevations and south of the divide. The trend for the next fire season is not favourable. Social Indicators

DPI Drought Hotline The DPI / DSE Customer Service Centre received 28 drought related contacts for the period 16th May to 6th June 2005. Queries included Exceptional Circumstances (12), carted water rebate (6), DHS – drought recovery program (3), drought feeding of cattle and sheep (3), rural counsellors (2) and one each for the the Utility Relief Grant Scheme and general information. The contacts were from the North West (7), South West (6), North East

DSC Report 2 (5), Gippsland (3) and Port Philip (3). They were completed by FAQ (20), referred (3) transferred (3), and information sent (2). Drought financial assistance Rural Finance Corporation reports 2,575 applications for the Exceptional Circumstances Interest Subsidy have been received to date with 2,002 approved and 427 declined so far. Total value of the subsidies approved is $34,325,306 with an average of $17,111. Dryland farmers in the Mallee and Northern Wimmera and dairy farmers in the Murray Irrigation were both granted full Exceptional Circumstances support on June 3rd. Farmers in these areas have been eligible for six- month’s income support since their applications were granted prima-facie support one and two months ago respectively. The success of this application means growers can apply for interest payment subsidies as well as income support for up to two years. On May 30th the Prime Minister announced the Australian Government’s new drought assistance package with changes to drought relief with key features detailed below. One of the main changes will be the higher threshold for the assets and income tests which should enable access to support for farmers who were previously ineligible. Also important is the review of areas where EC support has recently lapsed. In Victoria these are the Central and North East. • The off-farm assets for EC business support (interest rate subsidies) will be doubled from $217,500 to $435,000. • The rate of the interest rate subsidy provided to farmers in receipt of business support assistance will rise from 50 per cent to 80 per cent for subsidies paid in the second and subsequent years of an EC declaration. • Subject to the passage of enabling legislation, from 1 July 2005 to 30 June 2006 a $10,000 annual offset against the income test for the EC Relief “income support”. The measure will be reviewed before June 2006 to determine if the prevailing drought conditions and outlook warrant any extension. • The streamlined re-assessment process for those EC declared areas nearing the end of their second year of assistance will become a permanent feature of EC arrangements. In the first instance, the 11 areas where EC declarations are due to cease by the end of 2005 will be assessed as a matter of priority. • National Rural Advisory Council (NRAC) will immediately review the status for those 22 EC regions that it did not previously recommend for a roll-over under the streamlined EC assessment process. NRAC will also be able to consider the roll-over of parts of EC declared regions with any revised boundaries to be developed in consultation with industry, state and territory governments. • Nearly $800,000 in additional funds will be provided to rural financial counselling services and $1.2 million will be provided to appoint ten additional counsellors in key areas affected by the drought. Rural Financial Counselling report The Premier, Steve Bracks, announced an extra $570,000 funding for three general and three financial counsellors to continue their work with local rural communities, whilst on tour of the North West on May 30th. The Rabobank Rural Confidence Survey (30th May) shows rural confidence has hit a near three-year low. The dry conditions around much of the country are negatively influencing sentiment. Lower commodity prices and high input prices are also major concerns. Dairy farmers remain the most confident, in contrast to all other sectors. Investment intentions and income expectations have also declined. Despite the fall in confidence, farmers in Victoria continue to be the most confident in the nation. The survey shows 37% of Victorian primary producers expect the agricultural economy to improve in the next 12 months, down from 45% in the previous quarter. And 23% expect conditions to worsen during the year, compared with 18% with that view previously. North East: Increased pressure on farmers now buying in fodder for the winter, particularly since exceptional circumstances funding was not rolled over for the third year. Farmers looking for re-assessment by NRAC. Farm succession is an increasing issue. Northern Irrigation: Anticipate low milk production over the winter. Farmers still require more information and resources on alternative land uses and farming. An ongoing issue is affordable and available health care including psychologists and counsellors. Central: A number of new clients are accessing financial counselling services for information on EC applications, and extending bank credit. Have also been supplying information on succession planning. The extended dry is seeing many farmers in a precarious position. Rural businesses are suffering with the prolonged dry period. Mallee: The CWA sponsored a suicide prevention seminar in Charleton, conducted by Lifeforce, with over 60 attendees.

DSC Report 3 Economic Indicators

Commodity prices and movements ABARE’s Australian Crop Report for June 7th 2005 forecasts a significantly reduced area and production of winter crops in 2005-06 due to lack of rainfall and poor seasonal prospects in the eastern states and South Australia. The total area sown to winter crops in Australia is forecast to be down by 8% to just under 18 million hectares in 2005-06 and the assumed poor seasonal conditions is expected to result in forecast winter crop production of around 26 million tonnes in 2005-06, down 17% on the 2004-05 season. In Victoria, the area sown to winter crops is forecast to fall by 14% to 2.4 million hectares in 2005-06. Production is expected to decline across all crops with wheat down 17% to 1.7 million tonnes, barley down 9% to 998,000t and canola to decline sharply by 41% to 234,000t. Good quality hay is scarce and prices have increased, but not as much as in 2002. Straw is now being used for feed. Grain prices have increased in the last month, but eased slightly this week on the forecast of rain. In addition, the Australian Wheat Board has released export wheat by tender to the domestic market specifically for drought fodder. Feed barley is still scarce. Prices for both sheep and cattle are down. Lamb numbers have been up and abattoirs at full capacity.

Commodity prices This Week Last Week Last Month Last Year Wheat APW pool 1 188.05 188.05 188.05 Wheat APW cash 1 209 214 200 Malting barley 1 205 205 205 Feed barley 1 190 185 180 Feed oats 1 165 165 162 Field peas 1 295 295 290 Canola (42% oil) 1 370 372 335

Yearling steers (C3 180-220 kg) 2 371 362 353 342 Bullocks (C4 340-420 kg) 2 304 304 310 320 Cows (D3 180-260 kg) 2 259 252 273 266 Lambs (16-20 kg) 2 331 353 344 423 Sheep (18-24 kg) 2 158 167 172 207

Old pasture hay (Bairnsdale $/t) 2 105 95 90

Water rights (Greater Goulburn $/ML) 3 no trade no trade no trade no trade

Grains are Portland cash price (except for APW pool) Stock prices are ¢/kg cwt Sources: 1 Weekly Times 2 Stock and Land 3 www.watermove.com.au Regional Reports

Mallee 10-60% of the Mallee has been dry sown depending on weed, financial and moisture conditions on farms. Areas without subsoil moisture will yield some 10-30% below average are predicted. Variable germination in paddocks with subsoil moisture could be challenging for weed control. Increasing enquires on livestock feeding. Farmer sentiment is at a low point with such a dry start. Wimmera Autumn set records for dry conditions with Horsham’s rainfall the lowest on record (28 mm). Grain growers up to the weekend had sown about 30% of their crop dry with vetch, beans and barley the most common. This will present difficulties for weed and insect control. No paddock feed remains and lambing ewes are being handfed which is risky. More farmers have retained stubble this year to maintain groundcover.

DSC Report 4 North Central There was 6 to 15 mm of rain across the North Central about 2 weeks ago. Those with more than 12mm have sown their crops. Stock is in good condition considering no pasture growth. Some properties will run short of feed and there is little prospect of pasture growth until August. Some are using stock containment areas. Some areas are carting water and there is some concern about saline water. Northern Irrigation Dry sown crops have emerged on lighter ground, but rapidly running out of moisture (10% of area). Yield potentials have already dropped by more than 20% in the western area. The failure of the autumn break, the lack of agistment and rising cost of hay and other feeds has led many farmers to reduce stock numbers for an anticipated hard winter. The fodder situation is deteriorating rapidly with dryland farmers hand feeding at high levels. Enquiries about stock containment areas starting to flow in. Port Phillip and West Gippsland Dry across all areas. Farmers are dry sowing and in all likelihood even if it rains may be unlikely to realise a good crop. Paddock feed is largely non existent across the whole area. Fodder will still be a problem. Some water carting has begun around Bacchus Marsh. East Gippsland With still no Autumn break, conditions are staying relatively warm given the time of year with little or no wind, and warm days despite frost. Feed quality has declined somewhat as well. Feeding of livestock has well and truly begun and will continue through to the spring flush. There is a need for most diary herds to put on weight before calving. Farm water storage’s are still critically low in the Tambo Valley. North East Rain will not provide cattle feed before late August. Significant amounts of crop sown dry including some canola that may now need to be replaced with a cereal. Paddock feed is variable. Feed quality after rain is likely to be poorer than previous years due to lack of clover germination. Cases of ryegrass staggers around Yea. Water is not an issue for most areas however, small dams on hobby farms are generally low. Some domestic water is being carted. South West A great deal of crop has been sown dry. A decent rain in the next week or so is still sufficient for average or close to average yields. Spring rain is still more important to crop yields than the first week of June. Some milking cows are coming into heavy concentrate feeding regimes leading to displaced abomasums and associated gut conditions. Ryegrass is frequently causing ryegrass staggers. Good quality hay no longer available, so farmers using other options such as grain. Farm dams and domestic water are running dry.

DPI response

Drought related activities held this month Mallee • DPI staff and around 20 farmers visited South Australia for an update on feedlotting of livestock for both maintenance and production. • Compiling details of farmers outside the declared Mallee and Northern Wimmera EC area interested in a new application. Northern Central • One newspaper article offering sheep feeding advice and printed information. There were ten enquires on drought feeding sheep and cattle to Bendigo office of DPI in the last week. Northern Irrigation Dairy: • Group meetings in the North East have focused on feeding decisions.

DSC Report 5 • Meeting held in North East with (local) representatives of Murray Dairy, Murray Goulburn Field Officers and Rural Financial Counsellor to identify longer term strategies (communications, meetings etc) appropriate to ongoing poor seasonal conditions. Cropping: • High levels of farmer enquires re: sowing and variety options • Increase in 1 on 1 visits.

Local workshops planned Northern Central • Meat & wool staff have training activities on feeding sheep and stock containment areas planned. Northern Irrigation • Cropping group newsletters (mid-June) will provide decisional advice, on sowing, crop type and varieties in response to the late break. Will include current status of soil moisture’s, deciles and yield forecasts. North East • Drought feeding sessions/feed budgeting sessions are being run with most Beefcheque / Lambcheque and Lifetime wool groups in the area. South West • Seasonal conditions discussed with the Target10 South West committee and the Meat and Wool Team meeting on 2nd June. As a result will conduct a media campaign focused on drought feeding of stock and feed budgeting. • RIST are planning a “Coping with the Late Break” workshop at Dunkeld • Two BestWool / BestLamb forums will have part of the program devoted to the dry season

Dry season related staff training activities • Brainstorming of dairy service providers to discuss current situation and trigger points held at Kyabram Dairy Centre on June 2nd • Meat and Wool Team (statewide) will provide skill development and refresher training for staff, including the use of Grazfeed, Stock Containment Areas, Pregnancy Toxaemia, Economics of Feeding for Production vs. Maintenance, Drought Assistance Package. • Ellinbank training for DSC reporting and update on drought resources.

Media and Communication

Media releases 3 Jun 2005 - More Victorian farmers now eligible for Australian Government drought support (AFFA) The Australian Government has boosted its support for Victorian farmers battling drought by declaring two new Exceptional Circumstances (EC) areas Agriculture Minister Warren Truss announced today. Mr Truss said he had accepted advice from the National Rural Advisory Council (NRAC) - an independent council of primary producers and agribusiness professionals - that 2,300 dryland farmers in the northern Wimmera/Mallee region, and 800 dairy farmers dependent on the Murray Irrigation System, would now be eligible for full EC assistance. 3 Jun 2005 - Beekeepers can access drought support measures (AFFA) Agriculture Minister Warren Truss has reminded Australia's beekeepers they can have access to the support measures announced in the 2005 Drought Package. 30 May 2005 - New drought package raises assistance to $1.25 billion. (Prime Minister of Australia) I am pleased to announce over $250 million in additional Australian Government assistance for farmers suffering the effects of the unremitting drought that continues to afflict many parts of Australia. The new 2005 Drought Package is in addition to the $1 billion that the Australian Government already expects to spend in dealing with this drought. 30 May 2005 - Premier tours drought affected North West (Office of the Premier, Minister for Agriculture) The Premier, Steve Bracks, today toured drought affected areas in north western Victoria with the Acting Minister for Agriculture, John Brumby.

DSC Report 6 Media headlines Farming and agriculture • Get some farmers off the land: expert Age 24/05, Australian Financial Review 24/05, Weekend Australian 28/05, Australian 30/05, Sunday Herald Sun 5/06 - Governments should stop “throwing money” at farmers and find a dignified way to get some to leave their properties, said Professor Cullen, the Prime Minister’s 2001 Environmentalist of the Year and a member of the Wentworth Group of Concerned Scientists. • Fury at scientist’s drought relief call Australian 25/05, Age 25/05, Stock & Land 26/05, Northern Times 27/05, Australian 31/05 - Nationals MPs Ian Causley and Bruce Scott as well as SA wheat farmer Allan Zerna have lashed out at Peter Cullen labelling his call to end drought relief for farmers working unsustainable lands uninformed and offensive. • Hay running out Stock & Land 02/06 - Hay for sale in Victoria is fast running out Australian Fodder Industry Association executive Colin Peace said oaten hay had almost sold out. • Drought-hit farmers need rain in 2 weeks Australian Financial Review 07/06 - The drought could cut the size of the region’s winter crop by 85% unless decent rains fall in the next two weeks. Drought • The well runs dry Stock & Land 19/05 - An estimated 2000 farmers spoke with their feet on Tuesday when they rolled up to an emergency drought summit in the central NSW town of Parkes. • Bracks tours big dry Herald Sun 31/05, Wimmera Mail Times 27/05, Swan Hill Guardian 27/05, Warracknabeal Herald 27/05 & 31/05, Weekly Times 01/06, Wimmera Mail Times 01/06, ABC Mildura Swan Hill Radio News 25/5, ABC Western Victoria Horsham 31/05 - Premier Bracks and acting Agricultural Minister John Brumby toured grain growing towns hit by years of inadequate rain. • Doyle listens to farmers Wimmera Mail Times 30/05, Warracknabeal Herald 27/05, Sunraysia Daily 27/05, Horsham 3WM Country Today 25/05, ABC Mildura Swan Hill Radio News 27/05, Horsham 3WM Country Today 27/05, Melbourne 3AW Radio News 29/05 - State Opposition Leader Robert Doyle visited the Wimmera to talk to drought affected communities. Drought financial assistance • Farmer shortage looms: Anderson Herald Sun 23/05, Warrnambool Standard 23/05 - Australia will face a shortage of farmers in the next 15 years similar to the current skills crisis unless the sector gets help said Deputy Prime Minister John Anderson. • Economist urgently needed: MP Swan Hill Guardian 30/05, ABC Western Victoria Horsham Radio News 27/05, Northern Times 31/05, Stock & Land 02/06, Mallee Ag News 02/06 - Member for Swan Hill, Peter Walsh, has called on the State Government to appoint a local farm economist as a matter of urgency to help provide local food producers with access to ‘pertinent’ farm data. • Howard unveils $250 relief package: Drought Breaker Border Mail 31/05 Warrnambool Standard 31/05 Geelong Advertiser 31/05 Age 31/05 Shepparton News 31/05, Sunraysia Daily 31/05, Shepparton WIN TV News 30/5, Wimmera Mail Times 01/06, Loddon Times 01/06, Cohuna Farmers Weekly 01/06, Sealake & Whycheproof Times Ensign 02/06, Stock & Land 02/06, North West Express 02/06, Gippsland Times & Maffra Spectator 03/06, Kyabram Free Press 03/06, Bendigo Advertiser 04/06 - Farmers will get big subsidies but no cash grants to help them through one of the worst droughts on record under a $250 million government package released yesterday. • 3000 win right to farm aid Weekly Times 08/06, Wimmera Mail Times 06/06, ABC Central Victoria Radio News 03/06, ABC Mildura Swan Hill Radio 03/06, Shepparton 3SR Radio News 03/06, 774 ABC Melbourne Radio News 03/06, Shepparton 3SR Radio News 03/06, ABC Western Victoria Horsham Radio News 03/06, Sunraysia Daily 04/06, Mildura 3MA Radio News 06/07, Country News insert 06/06, ABC Mildura Swan Hill Radio News 07/06 - Farmers across north- west Victoria have received the next best thing to rain with announcement of full exceptional circumstances declaration for their region.

Compiled & edited by Katherine Hollaway, and proofed by the Drought Response Manager.

DSC Report 7