After prolonged drought conditions, which have delivered three years of decline in Australia’s grain production and exports, Rabobank is forecasting the nation’s crop planting to be up by 26 per cent on last season to 22.5 million hectares, 12 per cent above the average.
Report co-author, Rabobank associate analyst Dennis Voznesenski, said rainfall received across large sections of NSW and Victoria during late summer and early autumn had set the states up well.
“Strong early season rainfall has put NSW in a great position to plant a large crop of six million hectares, up a staggering 95 per cent from last year and 31 per cent above the five-year average,” he said.
“This planting program has been driven by the best opening rain in three years, but also the challenge of sheep and cattle restocking at high prices, which has prompted putting more country to cropping.”
Victoria’s planted crop for 2020-21 is forecast to be up 14 per cent to 3.5 million hectares.
For wheat, the report says, a total harvest volume of 26 million tonnes is “not unrealistic”.
Rabobank senior grains and oilseeds analyst Cheryl Kalisch Gordon said the promising crop outlook was welcome news after years of drought and the severe disruptions of summer bushfires and COVID-19 in the first half of 2020.
“While it’s still around six months until the grain is in the bin, all the hallmarks of an above-average season are now falling into place,” she said.
“With the Bureau of Meteorology’s forecast for above-average rainfall for all Australian cropping regions during the critical growing months of June to August, these increased hectares planted are expected to combine with at least average yields to deliver an average to above-average grain crop.”
Dr Kalisch Gordon said eagerness to "make hay" while there was moisture around after drought had featured in farmers’ decisions to expand their planted area in 2020-21.
A more buoyant outlook for wheat than barley had prompted greater increases in wheat planted compared with last year and longer term averages.
While the renewed supply of Australian grain would see prices move down from the drought-driven highs of recent years, the Rabobank report said average prices were expected to “remain in sight”, supported by an ongoing softer Australian dollar.
Export volumes — although remaining challenged by competitive global supplies along with the Chinese barley tariffs — would likely increase by as much as 70 per cent on last year.
This could see Australia set to export up to 17.5 million tonnes of wheat (up 110 per cent on last year), 4.5 million tonnes of barley (up 13 per cent) and two million tonnes of canola (up 17 per cent).
12°C