Farming News - Australia: Grain and Feed Update

Australia: Grain and Feed Update

11 Jul 2019
Frontdesk / Arable

Wheat and barley production in Australia is forecast to rise in MY 2019/20 as a result of expanded planting area for both of these crops, as well as improved moisture conditions in some production regions. Drought conditions, however, still remain in a substantial part of the growing area. For wheat, although production is forecast to increase to 21.5 MMT in MY 2019/20, this is still below average levels. The reduced wheat supply in MY 2018/19, as a result of the drought, has resulted in reduced exports to key markets such as Indonesia, as well as imports of bulk wheat grain for the first time in a decade.

Wheat planting in most of Australia commences in April and concludes in early July. Wheat plantedarea in MY (marketing year) 2019/20 is estimated to have expanded from last year’s drought impactedcrop, although still remains below average levels due to continued dry (and even drought) conditions in some growing areas. For northern New South Wales, Southern Queensland and Western Australia soil moisture was especially dry around planting and because of this there was a greater amount of dry sowing of wheat into the soil. In Western Australia, although the fall weather (March-May) was extremely dry at planting (making a repeat of the bumper crop from last year unlikely), timely rains in June have improved the prospects.

Parts of Victoria and southern New South Wales, however, received sufficient rains and are looking at a good start to the season with very positive prospects and soil moisture. The chart below shows rainfall percentages in June, showing above average rainfall in parts of Western Australia, South Australia and Victoria but also showing the continued below average rainfall in northern New South Wales and Queensland. The second chart shows that drought conditions are continuing in those areas.

According to the three-month rainfall outlook from the Bureau of Meteorology, rainfall from July to September in much of the cropping region is likely to be below average, which if realized would create even more strain on those crops planted into dry conditions.

The Australian Bureau of Agricultural and Resource Economics and Sciences (in their June crop report), estimate wheat area to expand 8 percent from MY 2018/19 with wheat area expected to increase in every major wheat-growing province except Western Australia (where some area is shifting to barley).

FAS/Canberra forecasts MY 2019/20 wheat production at 21.5 million metric tons (MMT), an increase of more than 4 MMT from the drought-impacted MY 2018/19 but still 13 percent below the 10-year average. As mentioned, although higher acreage and ample moisture in some areas is expected to boost production from last year, continuing drought conditions in other key wheat growing regions could constrain production growth. Overall production prospects, however, will largely be determined by spring rainfall totals.