It is usually better to be too wet rather than too dry, and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has recognised the season in its’ September Crop report. Unless something goes drastically awry, there will be no shortage of grain this year.
We know from previous crop reports that the strong prices seen early in the year had encouraged record plantings of wheat and canola, with production then hinging on yields. The season to date has been kind to growers on both east and west coasts, and as such we’ve seen a lift in expected yields.
Figure 1 shows ABARES expect yields of wheat, barley and canola to lift strongly, but not quite back to the records of last year.
Wheat yields for 2022-23 are forecast at 2.47t/ha, a 7% lift on the June forecast, but still 11.5% behind the record set last year. Driving the increase in the forecast was Victoria with a 15% yield hike on the June report.
All other states also had yields lifted, with the bulk of the increase in production coming from WA. Over in the west, yields are expected to increase 7% to 2.22t/ha, which adds 750,000 tonnes to national production.
Total wheat production is now forecast at 32.23mmt, which while being down 11% on last year, would still be the second highest on record.
The improved yields are even better for barley and canola. Barley yields are expected to lift 11% from the June forecast to 2.92t/ha, just 6% behind 2021-22. For production this adds 1.36mmt to the forecast, pushing it to 12.25mmt, which would be the fourth highest on record.
Canola yield forecasts grew the most on the June forecast, lifting 13% to 1.84t/ha. ABARES also updated plantings on canola, lifting by 5%. The result of increasing yields and plantings is a big lift in expected canola production. National production is forecast at 6.64mmt, up 18% on the June update, and down just 2% on 2021-22.
What does it mean?
With the expected increase in yields, Australia is on track to produce the third very large crop in a row. Rising crop expectations are being priced into markets. While the spread of local prices to international markets has improved, they are still historically weak. This could become worse at harvest, with selling pressure likely to come on with a large crop.
Key Points
- The ABARES September Crop Report has been released, with increases in yields for major crops.
- The good season is driving increases in production forecasts.
- Another large crop will likely see pressure come on prices at harvest.
Click on figure to expand
Click on figure to expand
Data sources: ABARES, Mecardo.
