The growth rate of Australia’s domestic grain demand will outstrip that of its supply over the next 10 years, a Rabobank report predicts.
The Australian Feed Grain Squeeze report projects that domestic demand for cereal grains will grow by 2.3 percent annually for the next 10 years, rising to above 17.5 million tonnes a year by 2029/30. Annual supply, meanwhile, is projected to grow only by 0.4 percent per annum.
Rabobank says the rapid demand growth will be driven by growing human consumption and the global shift towards protein-heavy diets, which will in turn lead to more grain being required to feed livestock.
The share of cereal grains going to feed could approach 70 percent by 2029/30, up from the current five-year average of 64 percent.
The domestic market for cereal grains (wheat, barley, oats and sorghum) is expected to soak up an additional 6 percent of the country’s annual production, leaving available supply for exports down by 2 million tonnes from the current five-year average of 22 million tonnes.
Australia is expected to remain a net exporter of cereal grains during the 10-year period, but the proportion of grains being exported is projected to fall from around 60 percent down to 53 percent.
“In the absence of any new technologies that offer step-change improvements in yield growth – and in the face of a drying climate and challenges to crop management – we do not expect future yield growth to exceed historical growth trends,” said Rabobank senior grain analyst and report author Cheryl Kalisch Gordon.
“While genetic modification and new plant-breeding techniques offer the potential for step-change increases in yield that would offset the feed grain squeeze, we consider the likelihood of development, adoption and end-market acceptance low within the coming decade.”
Australia’s average annual cereal grain production is forecast to be around 37.5 million tonnes in 2030, up from 35.8 million tonnes, which is the five-year average to 2018/19. The country’s continuing vulnerability to year-to-year variations, however, means “a range of 20-52 million tonnes must be considered part of the outlook,” said Gordon.