Originally Published November 5 2022
Australia was on track to harvest a near-record winter grain crop of 61.9 million tonnes, according to Rabobank’s 2022/23 Australian Winter Crop Forecast.
But the report says widespread flooding and record rainfall, especially across Victoria and NSW but also in other states, is fast changing the outlook.
Which will all have an impact on grain volume, yield and quality in parts of the country.
Report author, RaboResearch agricultural analyst Dennis Voznesenski said a substantial increase on last year’s rainfall across the Mallee and Wimmera in Victoria and Murray Mallee in South Australia had set up some farmers in these regions to harvest all-time record crop yields.
NSW farmers, however, especially those in central regions, are battling conditions even wetter than last year.
“Excessive rain leading into harvest followed significant issues at planting, where some farmers replanted up to three times or had to abandon hectares all together,” he said.
“But now Queensland and NSW are facing downgrades in yield and quality, and rain forecasts for the Mallee, including the upper Mallee, are telling us there will be more, a lot more than average, so the outcome is still a moving target.”
Just a month ago Quambatook farmer Lou Chirnside, looking at a massive canola crop, as well as other cereals, reckoned the only thing that might get in the way was frost.
He said things were actually a little dry in July, which checked the canola crop, but some timely rain, and a further 20mm in September had been really helpful.
But the region received 145.2mm in 12 days during October – a record for the month. Its long-term average for October is 36.7mm.
Year to date it has received 517.9mm against a year-to-date average of 315.8mm.
The figures are being mirrored in central and northern Victoria – and the rain is still falling.
Updating the original report, the specialist research unit of the agribusiness bank said that despite the weather challenges, the nation is set to harvest its third consecutive bumper winter crop.
Forecast to be down only one per cent on last year – which broke all-time production records – the total grain crop is estimated to be 41 per cent above the five-year average.
While farmers in some parts of Australia will “reap record or near-record crops”, others in areas across NSW and Victoria are facing “yield, volume and quality downgrades due to excessive rains, washed out fields and un-harvestable crops”.
Mr Voznesenski said while it is too soon to quantify the impact of heavy rainfall and flooding in recent days in Victoria on the state’s overall production, “there has been significant impact to yields on low-lying crops with many under water in central and northern Victoria, however, crops on rolling and rising country have fared better”.
Nationally, Rabobank forecasts wheat production to come in at 35.5 million tonnes – down two per cent on last year, but 47 per cent above the five-year average. Barley production is expected to reach a record 14.8 million tonnes, up seven per cent on last season and 31 per cent above the five-year average. The canola crop is forecast to reach a record 7.2 million tonnes, also a seven per cent increase on the previous year and a whopping 81 per cent up on the five-year average.
“While Victoria was on track to break production records until last week, we are going to have to wait for all the forecast rainfall to come through and for waters to recede to see the full impact of the rains on production,” he said.
“The unfavourable conditions mean harvest is likely to be drawn out into January.”
“Across NSW, parts of Victoria and southern Queensland, we expect to see considerably fewer hectares harvested than were planted due to excessive rains either at planting, during the growing season or leading right into harvest.
“And the challenge of a wet harvest will be compounded by labour shortages, with many farmers having to change harvest strategies as a result of insufficient labour.”
Until the recent flooding, Victoria’s total winter crop had been expected to come in at 11.5 million tonnes, an all-time record exceeding 2020/21 (the last record) by 17 per cent and up on last year by 26 per cent.
With NSW hardest hit by excess rain throughout the season, the state’s grain and oilseed production is expected to come in 28 per cent below last year, at 13.6 million tonnes.
The bumper harvest will also likely cause more transport headaches, with plenty of grain and oilseeds for the export market.
However, the ability to supply those 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 estimated 2021 national export capacity of 47.5 million tonnes, Mr Voznesenski added.
For Australia’s grains and oilseeds, the report sees the strong local supply limiting the potential of prices moving above current levels for a sustained time during the harvest period.
“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.”
Although global grain prices are expected to remain above the five-year average for the next 12 months as supplies from Ukraine and Russia continue to be unpredictable and global stocks below average, prices are not forecast “under the base (most likely) case” to head back up to record levels seen between March and June this year, Mr Voznesenski said.
