Record wheat crop still a chance

Posted by Editorial on 13th May 2008

Predictions of a record Australian wheat crop have been hit by drought in the grain belt of NSW. Despite this, record planting levels are set to become a reality with strong harvests dependant upon some wet weather in the coming months.

The NSW Government have released their latest drought figures, which indicate 48.4% of the state is now in drought as opposed to 42.9% in March.

The NSW DPI has now predicted planting of about 3.4 hectares of wheat with those figures reliant on “good soaking rains”. Last year, just over 3 million hectares were planted but a mere 1.63 hectares were harvested due to the drought. This figure was the lowest for over a decade.

Following plenty of summer and early autumn rain in many areas of NSW and Queensland there were hopes for a bumper season. These hopes appear dashed, at least for NSW, but average rainfall should still see a marked improvement on last year’s harvest.

Victoria’s DPI, meanwhile, have just announced their expectations of a record planting program and there has also been positive reports from WA indicating wheat production records could be possible.

Chris Sounness, from the Victorian DPI Grains Team, said wheat is likely to be the largest crop sown with an expected 1.6 million hectares this season – more than a 20 per cent increase compared to the 2005-06 ABS data, the official figures from last year were unavailable. He also indicated that farmers could reap great benefits if expected rainfall levels eventuate.

“The upward movement in commodity prices is encouraging growers to increase the area they crop,” Mr Sounness said. “The prospect of a record year if we see average rainfall in 2008 could ease the debt burden faced by many growers on the back of years of drought and below average rainfall.”

The Australian Bureau of Meteorology (BOM) has indicated that the La Niña event in the Pacific Basin is weakening and are now less confident of above average rainfall in south and south eastern Australia, with predictions of such a result now falling to a 50% probability. Northern NSW and Southern Queensland are still more than likely to have above average rainfall, however. Overall expectations for Australia’s wheat production have been much more bullish than previous years with Rabobank last month indicating that wheat production could reach 23-26 million tonnes, dwarfing figures of 10 and 13 million tonnes over the past two years.

With wheat prices comfortably higher than historical averages, Australian farmers are hoping for a great season. And, with food prices rising, any increases in production will also be good news for consumers, food manufacturers and food retailers alike.