Orchards, grazing could take over marginal cane land
CANE farmers on marginal land in the Mackay region could turn to orchards and grazing as returns in the sugar industry dwindle, a leading rural property agent predicts.
Cane farmer and Landmark Harcourts rural agent Gary Johns said 'dress-circle' properties - the best production land - sold quickly because of the expected return and did not come on the market often.
However, some of the more marginal farms could be on the market for years, and a low sugar price was not helping.
The current price is about US$380 a tonne, down from more than US$500 a tonne two years ago.
Forward price estimates until 2020 shows it remaining under US$440 a tonne.
Mr Johns said the resulting slim margins were making it difficult for farmers to justify remaining in the sugar industry. "I think a lot will go in to orchards, particularly in the Pioneer Valley," he said.
Despite cane supply agreements and forward pricing contracts in the industry, he said farmers without supply contracts could get out of the industry quickly.
"I could cut mine right now - send it out to the drought-stricken west and it could go down the throat of cattle," he said.
He said it was complicated for farmers to get the best return on their crop and they needed to choose the right marketing tools.
"You will have good cane growers that will get out of the industry," he said.