Dry spell strikes blow to Australia’s winter crops

Below-average rainfall and frost have led to dramatic cuts to wheat, barley, canola and chickpea production forecasts.

Australia’s winter crop production is expected to fall by 39 percent in 2017-18 compared with the previous season – 9 percent further than that forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences in its June 2017 crop report.

The Australian government agency expects wheat production to decrease by 38 percent to 21.6 million tons, with barley output set to fall by 40 percent to 8.0 million tons and canola production to reduce by 33 percent to 2.8 million tons.

Oat crops are expected to be hit the hardest, suffering a 45 percent drop to 1.0 million tons – while chickpea production is also slated to fall by 36 percent to 1.2 million tons.

Actual yields could fare worse should average spring rainfall – which the Bureau of Meteorology is predicting for the three month-period from September to November – fail to materialize.

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“The winter crop production forecasts included in the September edition of the Australian crop report are reliant on sufficient and timely spring rainfall, particularly in the central west cropping region of NSW, and on Eyre Peninsula and Yorke Peninsula in [the state of] South Australia,” a spokesperson for the Department of Agriculture told Agri Investor. “If there is not sufficient and timely rainfall, particularly in these cropping regions, it will put the production forecast at risk of not being realized.”

National Australia Bank also cited seasonal conditions as “a major consideration” in its September update on the sector.

“While most of southern Australia […] saw above-average rainfall last month, north of the line it remains very dry indeed,” NAB said in its report. “Frosts in New South Wales and Queensland have caused potentially considerable damage to winter crops.”

Like ABARES, the bank has again revised downwards its wheat crop forecast to 20.1 million tons from the 22.7 million tons it had estimated in August. “It is possible that this estimate will fall further next month,” NAB warned in its latest report.

Despite the significant decrease, the latest forecast for the country’s winter crop production “is two percent above the 10-year average to 2015-16,” ABARES’s chief commodity analyst Peter Gooday said.