SYDNEY, (Reuters) – Australia on Tuesday cut its wheat production forecast by nearly 20 percent for the year through June 2020, as an unrelenting drought across the country’s east coast will likely see output fall to an 11-year low.
As Australian farmers were harvesting crops, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) pegged production of the country’s largest rural export at 15.85 million tonnes, down nearly 18 percent from its previous estimate in September of 19.2 million tonnes.
By comparison, last year Canada produced almost 32 million tonnes of wheat.
The forecast is nearly 35 percent below the 10-year average, and means a third consecutive year of lower-than-average production – as output falls to the lowest level since 2008.
The decline has crippled growers and exporting companies, and has provided a hurdle to an economy that is already threatening to stall.
ABARES said the dwindling production was driven by hot, dry weather across major producing regions, which has left many farmers struggling to produce any crops at all.
“We’ve finished harvesting. It was a pretty sad affair, with production about 90 percent down on normal,” said Dan Cooper, a farmer in Caragabal, New South Wales, located 400 km (250 miles) west of Sydney.
Cooper, like many Australian farmers, has suffered from sustained dry weather. The country’s weather bureau on Monday said the last three months constituted Australia’s driest spring, which has wilted crops.
Dwindling Australian production has propped up global prices,, which hit a five-month high last week amid concern over smaller global output.
Lower wheat exports is also likely to damage Australia’s stuttering economy.
*Drought* After very warm and dry spring, Australia is on the verge of a record hot summer and even stronger bushfire season. Drought is about to get even more severe, extending the farming crisis and water shortages. The Indian Ocean is mainly to blame.https://t.co/nyVOHb9G0U
— severe-weather.EU (@severeweatherEU) November 30, 2019
Australia is among the world’s top 10 exporters of the grain, typically contributing about two percent to gross domestic product.
With many farmers struggling to stave off bankruptcy, Australia’s conservative government has been offering greater financial aid.
The dry, arid land has also contributed to Australia’s bushfire crisis.
Bushfires have left at least four people dead and destroyed more than 400 homes since the start of November. Fires are still burning in New South Wales, Victoria, South Australia and Queensland states.
Bushfires are common in Australia but the fire season has begun much earlier than usual, with temperatures soaring above 40 C well ahead of the start of the southern summer and high winds hitting the drought-parched landscape.