The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released it’s June Crop Report last week, and it looks like the energy crisis has had it’s impacts. Planting areas are down, and production down further.
With the conflict in Iran starting just as croppers were gearing up for planting, the volatility in input costs brought plenty of uncertainty for those planting winter crops. In addition, a dry summer and early autumn in NSW, and stubbornly low cereal prices, combined to see planted areas pulled lower.
Wheat plantings in NSW are forecast to be down 22%, barley down 10% and canola down 32%. The more marginal production areas of NSW are coming out of winter crop production, and this, along with a drop in forecast yields has pulled expected production lower.
Plantings in Queensland are also forecast to be significantly lower, but Queensland is a relatively small player in winter crop production. Last year 7.6% of east coast wheat came out of Queensland.
WA is also forecast to have significantly lower wheat plantings, down 10%. In WA the fall in wheat has been somewhat taken up by canola and barley, with plantings up 4% and 11% respectively.
In addition to lower plantings, yields are also forecast to fall, and this is where the variation will occur. National wheat yields are forecast at 2.45t/ha, down from 2.9t/ha in 2025-26. The Crop Report was likely put together before the late May rains, and with some marginal areas coming out of production, there is real scope for yields to lift with a better than expected season.
Figure 1 shows wheat production is forecast to be around the lows seen in 2023-24, driven more by lower plantings than lower yields seen back then.
The increase in barley plantings is forecast to keep production at historical strong levels. Forecast average yields of 2.85t/ha are better than the 10-year average, which is helping keep production at what would be close to the second highest level on record (figure 2).
With canola prices still strong, relative to cereals, but costs of inputs on the rise, growers decided to pull back plantings, but only slightly. Figure 3 shows east coast canola production is forecast to be at its lowest level since the drought 2019-20.
What does it mean?
The decreases in production across the three major winter commodities are not enough to see prices detach from international benchmarks. Lower plantings will place more emphasis on rainfall across the growing season to drive yields and production.
Key Points
- The ABARES crop report shows lower plantings on the east coast driven by NSW.
- Yields are also expected to fall with more challenging seasonal conditions.
- Forecast production isn’t low enough to see prices detach from international benchmarks.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: ABARES, Mecardo
