Good growing conditions will see Australian farmers harvest a record sized set of winter crops, including wheat, barley and canola.
But the wet weather in much of NSW and parts of southern and central Queensland has hit yields and quality levels, especially in wheat with farmers facing sharply lower prices.
“Crops were generally in good condition at the end of winter and a combination of sufficient rainfall and mild temperatures over spring further improved crop prospects nationally,” the Australian Bureau of Agricultural and Resources Economic and Sciences (ABARES) said in an update issued Tuesday.
ABARES said that in the eastern states, grain fill and yield potentials were increased by rainfall that continued throughout early spring.
In South Australia and Western Australia, yield potential in most cropping regions were improved by timely rainfall and mild temperatures in October, which helped to largely offset damage to prospects caused by dry conditions and frost events in September.
The Bureau said that winter crop production in Australia is forecast to be 5% higher at a record 58.4 million tonnes.
Production is expected to be a record high in Western Australia and the second highest on record in NSW and Queensland while production in Victoria and South Australia is expected to be well above average.
The latest forecast is a 6.6% upward revision from the forecast the Bureau published in the September issue of its Australian Crop Report.
For the major winter crops, wheat production is forecast to reach a new record of 34.4 million tonnes in 2021–22, up 3% from the previous record set a year ago.
Wheat output is expected to be the highest in NSW, followed by Western Australia. For NSW, output is seen rising to 12.2 million tonnes, up from 11.1 million projected in September. In WA, wheat production is seen at 11.7 million tonnes against 11.5 million in September.
Barley production is forecast to increase marginally to reach the second highest on record of 13.3 million tonnes, 2% below the previous record set in 2016–17.
Canola production is forecast to reach a new record of 5.7 million tonnes, 27% above the previous record set in 2020–21.
But the wet weather is taking a rising toll on yields and quality.
ABARES said the continued showers are hitting the protein quantity of the wheat crop.
“Heavy rainfall in November in eastern states and South Australia has delayed crop harvests and is likely to result in quality downgrades of crops in some areas,” it said.
“Damage to crops is expected to be the worst in New South Wales where most cropping regions are set to have one of their wettest November on record. Early receivals in New South Wales have pointed to lower quality wheat in some regions, ABARES said.”
With the supply of premium wheat quantity seen tightening, export prices of APW (Australian Premium White and used for noodles, bread and high-quality pastries) wheat have reached a record high.
The export price of Australian wheat rose $A26 in November to record high of $A365 a tonne on November 29, according to S&P Global Platts. Prices for APW are up over 40% higher over the year thanks to rising global prices.
However, the prices of ASW (Australian Standard White) wheat have fallen as arrivals of standard wheat have risen and quality levels declined.
The FOB prices of ASW white wheat fell nearly $A15 to $A317.50 a tonne on Monday, according to S&P Platts.
GrainCorp and Elders are the two listed companies with direct involvement in the grains sector – GrainCorp more so with its large presence on the East Coast. It has spent heavily on new storage and receivals facilities.
In its recent full year profit report for the period to September 30, GrainCorp outlined its predictions for the expected record crop.
“We expect the 2021-22 ECA winter crop currently being harvested to be well above average. This will support grain and oilseed receivals into GrainCorp’s country storage facilities and a continuation of the strong export program in FY22,” CEO, Robert Spurway said in November.
“We have prepared for the 2021-22 harvest by building a significant amount of new storage capacity and re‐opening ‘flex’ sites to accommodate the demand. We have also recruited over 3,000 harvest casuals to help manage the demand across 160 country sites and seven ports.”
“The anticipated strength of the 2021/22 crop and positive seasonal conditions will also have a positive flow-on effect for FY23, with high levels of carry-over grain expected to continue,” Mr Spurway said.
And ABARES said the current summer crop is looking good, but the current wet conditions in much of NSW and parts of Queensland could have a big impact.
But the wet weather will provide some benefit to irrigated rice and cotton.
ABARES said it expected the area planted to summer crops in 2021–22 to increase by 36% to reach 1.4 million hectares.
“Increased availability of irrigation water is forecast to result in higher plantings to rice and irrigated cotton, while grain sorghum plantings are also forecast to rise due largely to improved planting conditions in central Queensland and northern New South Wales.”
“However, record high November rainfall in summer cropping regions has likely damaged some early sown crops and may limit the ability to complete intended planting programs if it remains too wet to access paddocks, especially in northern New South Wales.
“Australian cotton production is forecast to increase by 79% in 2021–22 to a near record of 1.1 million tonnes. This forecast increase is in response to the prospect of better returns relative to alternative crops, improved supplies of irrigation water and favourable soil moisture profiles in most of the cotton growing regions of New South Wales and Queensland,” ABARES forecast.