Australia wheat production forecast to increase

21.07.2016

The outlook for Australian winter crops in 2016-17 has improved significantly due to a turnaround in seasonal conditions which has seen sufficient rainfall in May and June, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a July 15 report.

The report said the weather outlook through September is positive as soil moisture in virtually all wheat and barley cropping areas has markedly improved on the relatively dry conditions which prevailed over much of the previous year. These better seasonal conditions are also positive for Australian summer crops, with a slight decline in production forecast for sorghum while rice is expected to rebound from water-based constraints on production which were evident in 2015-16.

Production of wheat and barley in Australia in 2016-17 is forecast to reach 26 million tonnes and 9 million tonnes, respectively. These forecasts represent an upward revision on the previous forecast due to favorable seasonal conditions across major cropping areas. In 2016-17, wheat production is forecast to increase by 500,000 tonnes on the revised official estimate. The barley crop is forecast to increase to 9 million tonnes. For 2016-17, the sorghum harvest is expected to decline slightly to 2.1 million tonnes due to lower export demand and a switch to more profitable crops. In 2016-17, the rice crop is forecast to recover to 450,000 tonnes on a milled basis in response to improved water availability and better seasonal conditions.  

The report said the continued depressed international wheat market has led Australian growers to begin to shift to more promising crops such as chickpeas, canola, oats and pulses. The harvested area for these crops is expanding while the harvested area for more traditional winter crops such as wheat and barley has been relatively unchanged. The areas planted to canola and oats are expected to increase by around 10% and 20%, respectively, in 2016-17 while chickpeas are also becoming more popular, according to the ERS.  

Australian exporters of wheat and coarse grains are facing more competitive international markets with Black Sea exporters and a number of other countries able to reach traditional markets due to the very low ocean freight rates now prevailing, the report said. Much depends on the Chinese market, where the outlook for Australian barley and especially sorghum exports does not look promising due to changes in Chinese agricultural policy.

The rice industry in Australia is switching to a greater reliance on branded food products to overcome a reliance on commodity price fluctuations. It is also diversifying through an expansion in Queensland, typically as a secondary crop in sugar growing regions.


world-grain

Readers choice: TOP-5 articles of the month by UkrAgroConsult