Victorian grain growers fear of a shortage ahead of sowing

Russia's invasion of Ukraine has pushed up prices of these vital inputs for farmers around the world, however more concerning is worldwide shortages of the key products too.

"Price is an issue at the moment but hopefully it is only temporary - availability at this time is our main concern," Melrose Agriculture's Hugh Barlow said.

"More of a concern is if everything turns to shit and we can't get oil and fuel, then you can't do anything - that will have a real impact if we can't continue to farm.

"No one won't buy diesel because it is too expensive."

The major Colbinabbin-based cropping family has their fuel supplier on standby, as they prepare for four weeks of sowing next month.

The Australian Institute of Petroleum reported the national average unleaded petrol price rose by 3.3 cents to a record $1.84/lt earlier this month, while diesel surpassed $2/lt at most of the state's bowsers.

Last week, oil prices jumped seven per cent after United States President Joe Biden announced a ban on Russian oil imports overnight, joining the United Kingdom in its stance.

President Biden warned Americans would see petrol prices rise as a consequence, saying "defending freedom is going to cost".

Petrol prices are already at record levels nationally and a rise in the global cost of oil has market commentators anticipating diesel to rise to nearly 300c/ltr in Victoria in the coming months.

Mr Barlow said while he would try and manage their fuel use and prepare for a shortage, most expenses were unavoidable.

"We will be in contact with the fuel supplier to shore-up our tank supply because come sowing, the tractor is going round the clock so we need the availability," he said.

"As long as you can still get fuel, you can continue to operate - the real issue is if there was a shortage and you can't get fuel or oil."

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Nutrien Ag Solutions agronomist Greg Toomey said there was increased risk attached to Victorian croppers' operations.

"Your gamble is higher and grain growers are putting more chips on the table before they've even started," Mr Toomey said.

"There is a switch to lentils in the Wimmera because they are high value and require less nitrogen inputs than oilseed or cereals.

"There is significant price increases for agricultural chemicals so all of these things point to an increase level of risk before you know the outcome."

The Russia-Ukraine war has renewed the surge in world fertiliser prices due to the skyrocketing gas prices, Mr Toomey said, which were tapping $1500/tonne - prices more than 200pc year-on-year.

Farmers were re-evaluating their fertiliser use this season for cereal crops, potentially leading to lower production at a time when Ukraine, who was responsible for 12pc of the world's wheat, struggles to export its grain production.

"The greatest area of concern is Urea and growers will be looking to secure it soon," he said.

"Prices were $1050-$1100/t a fortnight ago and now, it could be as much as $1500/t.

"Suppliers are struggling to price fertiliser because until it is on the boat and we know the cost of freight can re-sellers price Urea to growers.

"Urea should be available but it will be significantly higher than what it was last year, probably double.

"By changing to legumes you reduce your fertiliser requirements so there will be a shift to legumes.

"The mathematics of how much nitrogen you put out is fairly set so wheat growers could accept a lower grade by not aiming for higher protein wheat and slightly modify their nitrogen use."

Mr Toomey said the cost to grow a wheat or canola crop was estimated to be more than 30pc higher year-on-year, from $550/ha to more than $900/ha.

"There is a greater level of risk but there is also the potential for very good rewards if the season is better than average and many parts of eastern Australia has good soil moisture reserves which would give growers a great deal of confidence to grow an above-average crop," he said.