Rabobank crop report counts the cost of drought

Rabobank has released its Winter Crop Production Outlook, showing that a combination of extreme dry weather and damaging frost will deliver Australia its smallest winter crop in ten years.

The specialist agribusiness bank forecasts a national harvest of just 29.3 million tonnes, down 23 per cent on last year, predicting the 2018/91 winter crop season “will go down as one of the worst in eastern Australia’s history”.

“For vast regions of the eastern states, there will be no harvest, and where there is a harvest, yields will be anywhere between 30 per cent and 50 per cent down on average,” the report says.

Reduced national production – along with continuing strong demand for feed grain in the drought-afflicted eastern states – is, however, expected to see record Australian grain prices hold well into 2019.

Australia’s national wheat harvest is forecast to come in at 16.8 million tonnes, down 32 per cent on last year and 21 per cent lower than the five-year average.

The bank forecasts total Australian grain exports to be down approximately 50 per cent on last year, at 13.9 million tonnes. Wheat exports are predicted to decline almost 50 per cent on last year, to 8.6 million tonnes – the lowest export volume since 2007.

Rabobank’s Agricultural Analyst Weslet Lefroy said significant rainfall across many parts of the country in recent weeks had come too late to have any meaningful impact on the nation’s grain production numbers.

“While some crops in southern regions may benefit from falls in October, the overall impact on improving national grains production will be minimal,” he said.

“In other regions, rain at this later stage of the season is potentially more a hindrance to harvest progress.”

Canola production is also significantly impacted, expected to be down 32 per cent on last year and also 32 per cent lower than the five-year average, at 2.5 million tonnes.

Western Australia’s escape from the crop production downfall

For the second year in a row, the report says, winter grain production will be lower than last year in all states except Western Australia, where that state’s overall grain production is forecast to be up three per cent on last year, at 15 million tonnes.

The reduced 2018/19 harvest will see WA, for the first time in 20 years, contributing more than half (52 per cent) of the national winter crop.

Mr Lefroy said WA production had been touted to be higher – potentially breaking the state’s record harvest of 17.7 million tonnes in 2016/17 – however significant back-to-back frosts in early spring had limited production in southern parts of the state, while crop potential in the north had been lowered due to lack of finishing rain.

Rabobank Australia

Rabobank Australia

Rabobank Australia is part of the world’s leading food and agribusiness specialist bank, Rabobank.

Add comment

Follow us

Don't be shy, get in touch. We love meeting interesting people and making new friends.