Analysts predicting lowest crop since 06-07

Analysts predicting lowest crop since 06-07

Cropping
The national crop could end up being smaller than last year following a poor spring in key production zones.

The national crop could end up being smaller than last year following a poor spring in key production zones.

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Some analysts are predicting this year's national winter crop will end up being even smaller than last year's drought ravaged edition.

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THE STRONG Indian Ocean Dipole (IOD) positive and its associated well below average rainfall could see the national winter crop falling to its lowest levels since 2006-07, lower than the drought impacted crops of the past two years.

Most of the year analysts have banked on an improved season in southern Australia, in particular Victoria and South Australia to drag the total crop above last year's drought impacted 30.4 million tonnes.

However, last year's crop had the saving grace of massive yields across large tracts of Western Australia and there are no areas forecasting a bin burster to drag national tonnage up this year.

This year the north of WA has been hit with dry and hot conditions, while in the Esperance region there is unease over the impact of a record breaking frost at a critical stage of crop development.

It has some forecasters trimming an incredible 5m tonnes year on year drop in WA production across wheat and barley alone.

Meanwhile what had the potential to be a bumper year across parts of SA and Victoria has come back to the pack on the back of a poor spring.

While farmers are still confident of harvesting average crops, prospects of higher than normal yields have gone out the window in light of the IOD impacted weather, which has seen less than 5mm for October across the majority of the regions with good yield potential.

There will also be isolated patches of frost damage across the two states.

In NSW there will be more grain harvested than last year, but coming off last year's winter crop of 2.9m tonnes, less than a third of the ten-year average, it is still not going to be a big year.

Early in the year Riverina crops looked reasonable, but a lack of subsoil moisture meant many paddocks have been cut for hay, with growers cashing in on the strong demand of fodder.

There are patches of reliable cropping area in northern NSW where there will be some volume of grain harvested but for most north of Dubbo it is set to be another extremely poor season.

It is a similar story in southern Queensland with only extremely isolated pockets of winter crop, although the Central Queensland harvest, currently in full swing, is seeing farmers generally pleased with results.

Peter McMeekin, Grain Brokers Australia, has shaved off 750,000 tonnes off his national wheat estimates in the past fortnight alone.

"In late September national wheat production was at 16.5m tonnes, and a week into October and it is a struggle to get the wheat crop above 15.75m tonnes," Mr McMeekin said.

"Falling production in both South Australia and Western Australia over the past few weeks have been the biggest contributors to that decrease."

Australian Crop Forecasters' James Maxwell is slightly more circumspect, with a wheat number of 17.7 million.

He said he still had Victorian wheat production at 3.8m tonnes and SA at 4m tonnes.

"I don't think it is quite as bad in those two states as some have said, although it has been very dry," Mr Maxwell said.

He also said he would be interested to see the end result with the WA crop.

"A lot of the downgrades are based upon frost damage which is notoriously hard to predict."

Mr Maxwell is forecasting a WA wheat crop of 6.7m tonnes, down from 10m tonnes last year.

Mr McMeekin said there would be differences in grain supply and demand this year.

While demand for grain from the key Queensland / northern NSW livestock sector is likely to remain steady the origin will change.

More grain will move from Victoria and South Australia and less from Western Australia, reflecting both balance sheets and freight costs.

Mr McMeekin said the domestic market would be the first concern for Australian producers.

"As national production decreases the exportable surplus will decrease, and any need to be competitive into Asia, for anything but inelastic Australian demand, will diminish accordingly," he said.

In terms of pricing patterns he said last year's lessons, where prices dropped post-harvest, may see buyers holding on longer to make their purchases rather than looking for ownership immediately after the grain was harvested.

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