Australian grain farmers saddle up for a ‘more subdued’ growing season after three years of bumper crops

Australian grain farmers are expected to produce a “more subdued” crop this year after three years of bumper yields, but WA’s average to above-average soil moisture levels are sending farmers’ spirits soaring. The USDA’s latest Grain and Feed Annual Australia report revealed there had been favourable conditions for planting but the expectation of a dry few months ahead meant production was likely to be down slightly. After two years of “planting nearly every available hectare to winter crops”, farmers were expected to wind back wheat plantings to 12.8 million hectares — which is still the second-biggest planting during the past 10 years. Wheat yields are expected to hover around 2.27t/ha. Australian farmers planted about 13 million hectares of wheat last year, producing a record 39.2Mt worth a huge $15 billion. “This fall (in planting area) is due to farmers having less suitable area available in crop rotations after two big-planted-area years,” the report revealed. “Farmers are expected to favor maintaining high wheat planted area at the expense of canola and barley . . . particularly due to the drop in canola prices since mid-2022. “Farmers will be reintroducing fallow areas into their crop rotations which will reduce the available area for winter crop planting.” Australian farmers produced a bumper 67.3Mt winter crop last year, including all grain varieties, with 26Mt from WA. National wheat production is expected to dip to 29Mt, down on the record 39Mt in 2022-23, and 36.6Mt in 2021-22. The report noted nitrogen prices had fallen from US$770 in May last year, to less than US$500 but were nearly double those in 2020. However, the report noted there was plenty to be wary of — including wheat prices falling 18 per cent from the peak of June last year and a below-average chance of median rainfall in coming months. In June last year, wheat was trading for about $390, but prices have fallen to about $320 this year. Prices for other crops have also dipped, with canola prices falling more than 40 per cent and barley about 18 per cent. Wheat exports are expected to remain strong this year, at 23Mt, representing a 7Mt decline from last year’s 30Mt but still the fifth-biggest wheat export program on records driven by a forecast 10.2Mt decline in production. The report noted Australia continued to focus on its top five wheat markets, with China “by far” the biggest by volume. After two years of rapidly ramping up wheat imports from Australia, China has so far accounted for more than 26 per cent of Australia’s wheat exports after buying 3.2Mt between October and February. Comparatively, the Asian superpower bought 2.6Mt during that same period last year and just 1Mt in that same period the year prior. South Korea has also been ramping up its purchases of Australian wheat, boosting imports by 800,000t to represent a 180 per cent increase year on year, while Indonesia and the Philippines also showed strong growth. The UK and Australia’s free trade agreement is expected to come into force in coming months, giving Australia an immediate, tariff-free quota of 80,000Mt of wheat and 7000Mt of barley to the UK. However, the report noted Australia was expected to continue to focus its trade mainly to its nearby Asian markets. Barley production has been forecast at 10Mt, down on last year’s near record 14.1Mt and below the previous 10-year average.