Australia’s troubled wheat crop

WINNIPEG, (MarketsFarm) – Things in 2019/20 are not looking good for Australia’s wheat crop and it’s not only due to the country’s ongoing drought. As production in Australia has been on the decline, it’s also losing its market share of global exports as the United States Department of Agriculture attaché reported.

Released on Jan. 31, the report stated Australia’s current wheat crop, estimated to be 15.0 million tonnes, is very likely be the smallest since the 2007/08 marketing year. The attaché’s estimate would put this year’s wheat production 2.3 million tonnes below what Australian farmers grew in 2018/19 and 40 percent under the 10-year average.

Production in the states of New South Wales and Queensland has been hardest hit by severe dry conditions over the last several years. That has resulted in poor yields and with some crops being cut for hay instead. In citing a report from the Grains Industry of Western Australia, the attaché said the state’s wheat production was halved from last year’s bumper crop to less than 5.4 million tonnes.

There has been one slight glimmer of hope in Victoria, which received enough precipitation for a decent crop. Combined with the drought conditions elsewhere in Australia, the state’s share of the overall production increased from 13 to 25 percent.

The slide in Australian wheat exports is forecast to continue in 2019/20, but the decline won’t be as severe as the previous year, according to the USDA attaché. In 2018/19 wheat exports plummeted 35 percent to 9.0 million tonnes and the attaché expects 2019/20 exports to slip by 1 million tonnes more.

While some of the declining exports can be attributed to decreasing production, there are other factors contributing to the situation. One was being Indonesia’s shift to better diversify where it acquires wheat. The attaché noted exports to Indonesia fell from 2.45 million tonnes in 2017/18 to 924,586 tonnes in 2018/19.

Also, exports to Malaysia dropped 26 percent to 544,338 tonnes, while those to Vietnam fell 20 percent to 881,533 tonnes.

 

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