The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released its December crop report late last year. Changes from the September estimates were relatively minor, but there were still a few surprises, and the market appears to be showing the impacts somewhat.
The
ABARES Crop Report is the main official update on Australian crop conditions
and expectations. Released in March,
June, September, and December, The Crop Report attempts to forecast major
winter and summer crop areas, yields, and production.
After
the record crops of the previous three years, 2023-24 was always going to be
lower, but croppers have come a long way in managing drier seasons.
The
December report shifted the estimated national wheat crop slightly higher,
adding 0.3% to forecasts to sit at 25.45mmt.
There was some production shaved off WA, but this was added to NSW as
yields came in higher than expected.
Figure 1 shows that if we disregard the last three years, 2023-24 would
be considered a bumper crop.
Barley
production also received a small boost, with forecast production up 3% to
10.76mmt. A 15% increase in expected
Victorian production was the driver, offsetting a 5% fall in WA. Again, it is a pretty good year for barley
production, despite seasonal and marketing challenges.
Canola
production received a 7% boost in production forecasts, as early yields were
stronger than expected. NSW and Victoria
production forecasts were boosted 19 % and 12% respectively. Figure 3 shows
canola production pegged at 5.52mmt, the third highest on record, which is
remarkable given the drier-than-normal growing season.
What does it mean?
The softer spring than expected seems to have held crop yields and resulted in a reasonable season for many growers who were preparing for the worst. Prices have reacted accordingly, with the local premium to international values easing throughout harvest as supplies came in stronger than expected.
Key Points
- The ABARES December crop report saw slight increases in expected winter crop production.
- A soft finish saw early yields beat expectations, resulting in a reasonable crop.
- The local premium to international markets has eased with better-than-expected production.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: ABARES, Mecardo
