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Australia counts the cost of wildfire damage to crops and livestock
AS UNPRECEDENTED wildfires threaten large parts of Australia, the nation's agriculture industries are counting the cost of the blazes that have scorched pasture, destroyed livestock, and razed vineyards.
With the fires still burning and fears of more to come, it's too early to quantify the damage, analysts and industry officials said. It's likely the country's dairy supply will be hit hardest, with key milk-producing states Victoria and New South Wales (NSW) suffering the greatest loss of farmland and infrastructure damage. Meat, wool, and honey output may also dip.
More than 11.4 million hectares have been blackened. That's about 1.5 per cent of the country's land area, but still an expanse greater than Scotland. Over half the ground burned is in NSW and Victoria, mostly dense native vegetation, forests and national parks, as opposed to crop-growing farmland and areas of intensive agriculture. Here's the impact so far on agriculture:
While fewer than 100 farms have been burned so far, wildfires have ravaged drought-affected dairying regions, including Victoria's East Gippsland and Bega Valley, in NSW, according to Peter Johnson, a group manager of farm profit and capability at Dairy Australia Ltd.
"Some farms are disposing milk in areas with power outages or where access issues are preventing tanker pick-ups, or low power supply is preventing the cooling of milk," he said.
Bega Cheese Ltd.'s shares plunged after fires threatened the town of Bega and ravaged Cobargo, a town about 30 km north, earlier this month. The stock has since recovered.
About 900,000 litres (238,000 gallons) of milk couldn't be collected from farms and as much as one million litres of additional supply may be threatened, the company said last week. Fonterra Cooperative Group, which collects milk in Gippsland, said its dairy regions remain largely unaffected.
Both NSW and Queensland, where 2.5 million hectares have been razed, are key producers of red meat. About 80,000 ranching properties are in the country's main affected areas, industry group Meat & Livestock Australia said on Tuesday.
Jason Strong, the group's managing director, said: "Our latest information is that 9 per cent of the national cattle herd live in regions that have been significantly impacted and a further 11 per cent in regions partially impacted."
Losses of about 1.7 million sheep and 450,000 head of cattle are likely, according to Matt Dalgleish, an analyst at Mercado. That would result in a 2.4 per cent reduction in the national sheep flock and a 1.8 per cent drop in the total cattle population in 2020, he said in a note.
Cheryl Kalisch Gordon, a senior analyst for grains and oilseeds at Rabobank, echoed that view, saying significant livestock losses are expected in eastern Victoria.
Wool is produced across Australia, with the exception of the Northern Territory. NSW produces the most, followed by Victoria. About 13 per cent of the national sheep flock is in regions that have been significantly impacted and a further 17 per cent in regions partially impacted, according to Meat & Livestock Australia.
Wildfires will reduce the country's wool production, which has already been declining because of drought. The output of shorn wool is forecast to drop 9.2 per cent to 272 million kilograms in 2019-2020 from a year earlier, Australian Wool Innovation forecast in November.
Vitalharvest Freehold Trust, which leases farms to Australia's largest listed fruit and vegetables grower Costa Group Holdings Ltd., said this month that the fires burning in southern NSW damaged packing equipment and several vehicles at its Tumbarumba berry farm.
Family-owned W.F. Montague Pty, which owns 75 hectares of apple orchards in the fire-ravaged town of Batlow in New South Wales, reported "only minor damage", according to the Weekly Times. Some 5,000 apple trees on the Montague property's boundary were damaged out of a total of about 200,000 apple trees, managing director Scott Montague told the newspaper.
It will be several weeks before a real picture emerges of the impact of wildfires in the affected areas, Wine Australia chief executive officer Andreas Clark said on Tuesday.
A review of fire maps suggests as much as 1,500 hectares of vineyards are within fire-affected regions. Even if all those vineyards were fire-damaged - and that's not the case - it would account for about 1 per cent of Australia's total vineyard area, he said. NSW is the largest wine-producing state after South Australia and contributes a third to the country's output.
Individual vineyards and wineries have suffered devastating damage, which would take years to recover, according to Wine Australia. Affected areas include the Adelaide Hills in South Australia, and the Shoalhaven Coast and Tumbarumba wine regions of NSW, and parts of Victoria and Queensland.
Cotton is grown in the inland regions of southern, central and northern NSW and central and southern Queensland. The country is the world's fifth-largest exporter of cotton, according to the US Department of Agriculture. While there's been no information reported about the impact on cotton from the wildfires, it's expected crops are mostly too far away from the major affected areas, and the irrigated nature of production should buffer output.
Australia is facing dwindling honey production as natural disasters, including droughts and wildfires, reduced the pollen and nectar honeybees require to survive and make honey.
In NSW, which produces 45 per cent of the country's honey, "thousands of hives have been burned and many thousands have been damaged" Stephen Targett, president of the New South Wales Apiarists' Association Inc., said Friday.
The state's honey production will be 30 per cent below the historical average for the next 10 years, he said. Field bees that collect nectar and pollen have been hardest hit by the wildfires. Sugar is being offered to starving bees, and some hives have been relocated to unaffected national parks.
"Very little honey will be collected between now and spring," nine months away, Mr Targett said. BLOOMBERG