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Drought bites in the east as ABARES forecasts 12pc cut to grain production

Clint Jasper, Tuesday September 11, 2018 - 13:20 EST
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Crops in New South Wales and Queensland have wilted through the drought this winter. - ABC

A rough winter for grain growers on the east coast has led the Australian government commodity forecaster, ABARES, to predict a 12 per cent drop in winter grain production from last year's total.

Released this morning, the latest crop report is tipping winter production — including wheat, barley, canola, pulses and oats, among others — to yield 33.2 million tonnes.

Overall, the harvest is nine per cent below the 20-year average.

Just two season ago, farmers across Australia's grain growing regions were preparing to reap a record-breaking .

But this year fortunes will vary wildly depending on what side of the country crops are growing, with drought-sapped crops on the east coast and predictions of a 's wheatbelt.

ABARES is not predicting a record crop for WA's farmers because of risks posed by frosts and the likelihood of drier than average conditions through spring, according to senior economist Peter Collins.

"WA farmers have enough moisture in the soil, so that's not going to cause any real dramas, but it could take the cream off the top and stop them getting a record," he said.

The harvest in WA is expected to lift 12 per cent on last year's totals, to 16.3 million tonnes, with a 9.6 million tonne wheat harvest.

Eastern farmers to take drastic hit

In Queensland and New South Wales, the two states hit hardest by drought, production is expected to drop by 38 per cent and 46 per cent, respectivelty, below last year's crop.

Despite many farmers on the east coast describing the current drought as one of the most severe they can remember, ABARES says crop production will not fall as low as seen in previous droughts, which hit farmers right across the country.

"In 2018-19, exceptionally unfavourable seasonal conditions have been limited to Queensland, New South Wales and parts of Victoria and South Australia," the report reads.

"In contrast, extremely unfavourable seasonal conditions affected most cropping regions in Australia during droughts in 1994-95, 2002-03, 2006-07 and 2007-08, resulting in lower national crop production than is forecast for 2018-19."

Money month

September is a critical month for crops, when spring rains can provide major boosts to yields — but it is also a time when the danger of frosts is at its highest.

While little hope remains for crops in New South Wales and Queensland, many in Victoria and South Australia remain on a knife's edge.

The Bureau of Meteorology has estimated the chance of spring rainfall exceeding median is low across Victoria's major cropping regions.

ABARES expects winter crop production in Victoria to drop by 29 per cent, at 5.4 million tonnes, and by five per cent in South Australia to 6.6 million tonnes.

Overall, ABARES is forecasting some significant drops in nationwide grain production this harvest:
Wheat production by 10 per cent to 19.1 million tonnes.
Barley production by 7 per cent to 8.3 million tonnes.
Canola production by 24 per cent to 2.8 tonnes.
Chickpea production by 69 per cent 351,000 tonnes.
Oat production by six per cent to 1 million tonnes.

Prices lifting

Australia is not the only grain-growing country dealing with difficult weather, as parts of western Europe and the United States struggle with abnormally dry to drought conditions.

The conditions have seen wheat contracts traded on the Chicago Board of Trade lifting, from just over $190 a tonne in mid-January to $273 a tonne at the close of trade on Monday.

In an August report, the International Grains Council said global stocks of wheat are forecast to fall from an estimated 758 million tonnes in 2017/18 to 716 million tonnes in the 2018/19 season.

A United States Department of Agriculture report, also released in August, said world wheat supplies would drop this season, to just under 730 million tonnes due to dry weather.

Continued drought conditions in several northern European countries, most notably Germany, resulted in lower production, down 7.5 million tons to 137.5 million," the USDA report read.

"This would be the lowest EU wheat production since 2012/13."


© ABC 2018

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