Dry conditions will likely reduce Australia’s winter crop production.
However, there is debate about whether the harm will come now during seeding or later in the year at reproduction as an El Nino takes hold.
Chuck Penner, analyst with LeftField Commodity Research, says growers are seeding into dry soil in eastern Australia.
The Australian Bureau of Meteorology says that large parts of Queensland, South Australia, New South Wales and Victoria have received zero to 60 percent of normal rainfall from Feb. 1 to April 30.
“It’s far, far below normal,” said Penner.
He believes that could have ramifications for Australian winter crops that compete with Canadian crops in overseas markets, specifically pulses, barley and canola.
About 97 percent of Australia’s desi chickpea crop is grown in Queensland and New South Wales, while most of its peas and lentils are planted in South Australia and Victoria.
“It is a supplier (of pulses) into India, which is already kind of desperate for pulses,” said Penner.
Much of the barley and canola are grown in Western Australia, where there has been good soil moisture, but New South Wales, Victoria and South Australia are also big barley and canola producing regions. Any production shortfall in those states could influence barley and canola markets.
“They have been selling heavily into China, which has been soaking up almost every grain of barley around the globe this last year,” said Penner.
Drew Lerner, president of World Weather Inc., isn’t nearly as concerned as Penner about the lack of rain in eastern Australia during the Southern Hemisphere summer.
“It’s really important to remember that the summer months don’t produce much rain,” he said.
“It’s irrelevant how much moisture occurs in February and March because it’s normally dry.”
What counts is what occurs in April and beyond, and there was pretty good precipitation in South Australia and New South Wales in April and rain was in the forecast for New South Wales and Queensland.
Lerner is concerned about the consensus in the weather forecasting community that a full-fledged El Nino has arrived.
“Most are of the opinion that it’s going to be a moderate to strong El Nino,” he said.
That usually results in dry conditions for eastern Australia during its late winter and early spring, which is during the critical reproductive phase of crop production.
He expects it to be dry from August through October.
Penner isn’t putting much faith in the El Nino declaration because there have been too many false alarms in the last year.
“To be honest, I don’t pay a lot of attention to it, frankly, because they’ve cried El Nino several times,” he said.
Even if El Nino has finally arrived, it is not a certainty that Australia will be dry, just a tendency, so Penner isn’t changing market outlooks or strategies. Growers could plant a lot of pulses if Australia gets decent rain in May and June.
Peter Semmler, principal of Agrisemm Global Brokerage, re-leased his Australian acreage estimates in the May edition of Saskatchewan Pulse Growers’ Pulse Market Report. He forecasts 1.23 million acres of desi chickpeas, up 68 percent over last year, 585,000 acres of peas, up six percent, and 535,000 acres of lentils, up 26 percent.
“Australia has the potential for a big year of pulse production provided the rain arrives on time,” he said.