A RECENT report reveals Australia is on track to harvest a winter grain crop of 61.9 million tonnes, with South Australia’s sights on record-breaking production.
Specialist agribusiness bank Rabobank’s 2022/23 Australian Winter Crop Forecast says some growers will see impacts on grain volume, yield and quality due to recent excessive rainfall.
The newly released report shows, despite the weather challenges, the nation is set to harvest its third consecutive bumper crop – down just 1 per cent on last year’s, which broke all-time production records – with the total grain crop estimated to be 41 per cent above the five-year average.
Nationally, Rabobank forecasts wheat production to reach 35.5 million tonnes, barley to reach a record 14.8 million tonnes, and canola to reach a record 7.2 million tonnes.
Report author, RaboResearch agriculture analyst Dennis Voznesenski, said an increase on last year’s rainfall across South Australia’s Murray Mallee region has set up farmers to harvest all-time record crop yield.
The state is likely to see a harvest of 10.7 million tonnes, 1 per cent above the last record set in 2016/17 and a 27 per cent increase on last year.
The bumper harvest will also see plentiful grain and oilseeds for the export market, according to the report, however the eligibility to supply world markets will be limited by supply chain bottlenecks both in regional areas and with capacity at Australian ports.
The exportable surplus in Australia from the 2022/23 harvest is expected to exceed the nation’s official 2021 export capacity estimation of 47.5 million tonnes.
“When an approximate figure is also added for still unsold 2021/22 crop, the exportable surplus could rise to 53.5 million tonnes, and this does not include an unknown volume of grain owned by the grain trade itself,” Mr Voznesenski said.
The report sees the strong local supply of grains and oilseeds limiting the potential of prices moving above current levels for a sustained time.
“With another near-record crop in the process of being harvested, and still significant carry-over from last year, we expect local prices to be pressured below global levels during the key harvest window from now until January and likely into late March,” Mr Voznesenski said.
“Growers may see some local price upside between late March and May, ahead of the northern hemisphere harvest. But from late quarter two next year – when northern hemisphere grain starts coming on to the market – and with an expected rise in the Australian dollar, we are likely to see downward pressure on local prices.”
Farm input costs – which have risen substantially over the past year – could weigh significantly on farm margins “moving forward”, according to Mr Voznesenski.
However, while there is notable risk for urea prices increasing, reprieve may be due for other fertilisers and agrochemicals in the near term.