Ending the year on a high, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has released its forecast for the season and it shows Australia is on track to record its largest grain harvest ever.
The revelation comes at the end of a year which ABARES has described as being generally favourable to cropping conditions in most parts of the country. Mild temperatures in spring resulted in an extended development period for winter crops, which only added to the huge harvests being recorded. All of this is despite water logging and flooding in New South Wales and Victoria.
In Queensland, grain growers are reporting record crops and storage provider GrainCorp has said it has brought in a huge 1.7 million tonnes of grain to its storage in the state; the largest amount it has received in five years.
This grain surge has even extended to chickpeas, which have become the highest value grain crop produced in Queensland, and mung beans, which due to a failed crop in China look to almost double last year’s crop and set a record of its own.
But Queensland is far from the only state producing record crops.
The ABARES forecasts show farmers in Victoria, South Australia and New South Wales are on track to harvest their largest wheat crops ever. NSW is predicted to produce 10.5 million tonnes, Victoria is expected to harvest 4.6 million tonnes, and South Australia is expected to harvest 6.2 million tonnes; all of which means Australia is set to produce 7.3 million tonnes more than it did last year.
Western Australia is the only state with a question mark hanging over its harvest. Weather which has seen areas of state drop below zero repeatedly looks likely to cause the biggest case of Frost damage in a decade. This means farmers in the state might have to sell premium crops at lower grades, but the extent to which this needs to be done won’t be known until the harvest wraps up.
In fact, the gains have been so significant ABARES had to raise its forecast of the 2016 wheat crop by 4.5 million tonnes from its previous September estimate of 32.6 million tonnes – which itself was still a record!
The record-breaking doesn’t stop at wheat either. Nation-wide, barley is also expected to record its single largest crop. The 10.6 million tonne harvest is a significant improvement on last year’s 8.8 million.
All considered, Australia’s grain, pulse and oilseed production is forecasted to break the 46 million tonnes mark for the first time, topping 2011/12’s record harvest of 45.7 million tonnes.
However, the huge haul is exposing some serious problems with the logistics systems behind the scenes.
The size of the crop and the ability of modern headers to deal with it have lead to exports exceeding the capacity of railways and to a huge increase in the demand for trucks, which means the cost of transporting the year’s bountiful harvest has risen significantly.
Furthermore, the huge amount of grains being put on the market has lead to nationwide price collapse for farmers. Wheat, for example, has fallen from its early November price of $248 to $211 – its lowest level since 2012.
But this isn’t necessarily bad news. In fact, it makes Australian grains much more competitive in an international market where a surge in bumper crops and record low shipping rates means Australia’s mark share is being challenged.
Already Australia is expected to take market share back from the black sea wheat producers Russia, Ukraine and Kazakhstan, who have slowly eroded Australia’s exports to Asia, the Middle East and North Africa.
Whilst the huge crops may have revealed a few logistical shortcomings, those problems are now firmly in the spotlight which means Australia and its farmers should be in a better position than ever to deal with future record harvests.
– Connor Pound