January 6, 2005

 

 

Australia's Wheat Production Estimated At 20.5 Million MT

 

Australia's 2004/05 wheat and barley crops are forecast at 20.5 million metric tons (MMT) and 6.5 MMT, respectively, unchanged from Post's previous forecasts, but significantly lower than the revised estimates of last season's record crops, according to the USDA.

 

Record 2005/06 sorghum production is expected due to record area and favorable weather conditions. ABS has released revised area estimates that indicate substantially more area dedicated to most crops last growing season.

 

GRAIN UPDATE

 

2004/05 Winter Crop Harvest Winding Down

 

Australia's 2004/05 wheat and barley crops are forecast at 20.5 MMT and 6.5 MMT, respectively, unchanged from Post's previous forecasts, but significantly below the revised estimates for last year's record harvests.

 

Lower forecast production in New South Wales is expected to be offset by slightly improved production prospects in Western Australia. The winter grain harvest is virtually complete in South Australia, Western Australia, Queensland and northern New South Wales, while harvesting continues in southern NSW and Victoria. The winter grain harvest will be complete by the early part of 2005.

 

Most of the grain growing areas in eastern Australia received heavy rainfall in December. The rains, however, were mostly too late to benefit yields in more northern cropping areas, where much of the crop had already been harvested. In southern NSW, Victoria and South Australia, the heavy rains provided some benefit for maturing grain crops, but also damaged more mature crops nearing harvest. Numerous reports have been received highlighting the downgrading of grain quality that resulted from these rains and other adverse weather episodes during the growing season.

 

Preliminary "receivals" by Australia's major bulk handlers provide a similar perspective on year-to-year forecasted production changes for wheat and barley.

 

Cooperative Bulk Handling, the major procurer of "grain" in Western Australia, had received slightly more than 10 MMT of winter grain as of December 20, 2004. CBH's current forecast for receivals in Western Australia is 10.5 MMT, which is up slightly from their prior forecast of 9.8 MMT, but sharply lower than the 15 MMT of grain received last winter season.

 

GrainCorp, the major bulk handler in eastern Australia, reported on December 16, 2004, that winter "grain" receivals in their area of operation (Queensland, New South Wales and Victoria) reached 7 MMT, with a total receival forecast for the season of 9.5 MMT. This 9.5 MMT forecast is down 1.0 MMT from their November forecast, and reflects the impact of inclement weather that has caused damage and quality deterioration. GrainCorp received about 13 MMT of grain from last season's winter crop.

 

Note: These "grain" receival figures include the total of grain, oilseeds and pulses. Also, receival figures do not equate with production, as other marketing options exist other than the major bulk handlers. Particularly this year, when increased quantities of lower quality grain may be retained on farm, or enter alternative marketing channels. Overall, however, receival data by these bulk handlers is considered to be an indicator of crop size.

 

Rains Improve Summer Crop Outlook; Record 2005/06 Sorghum Crop Expected

 

Australia's grain sorghum production in 2005/06 is forecast at a record 2.4 MMT, up from Post's previous forecast of 2.23 MMT and last season's revised estimate of 2.1 MMT. The increased production forecast is due to excellent soil moisture in key growing regions of northern New South Wales and southern Queensland. Sorghum planting for the 2005/06 crop will continue into the early part of 2005. The previous record sorghum crop was the 2.2 MMT produced in 2000/01.

 

December 2004 weather was generally very favorable for summer crops. Much of northern NSW and central and southern Queensland, the primary summer crop producing areas, received heavy, widespread rains during the month. The rainfall boosted soil moisture profiles and irrigation water supplies, benefiting sorghum, sunflower and cotton. The heavy rain did some damage to established crops, but this was offset by the overall benefits of the added moisture. Crop areas in southern NSW also received above-normal December rainfall, which benefited rice, cotton and sorghum grown in the region.

 

The record expected sorghum crop in 2005/06 will help boost feed supplies and should provide sufficient quantities of grain to push exports to near- record levels, as well as provide additional quantities for intensive livestock industries. Post forecasts MY 2005/06 (Mar-Feb) sorghum exports at 775,000 MT, 35 percent higher than the revised export projection for MY 2004/05.

 

Revised Grain Area and Production Estimates

 

The Australian Bureau of Statistics (ABS) has published preliminary area and production estimates for principal field crops for 2004, which includes the 2003/04 wheat, barley crops and cotton crops, and the 2004/05 sorghum crop. These figures are contained in ABS's Principal Agricultural Commodities, dated November 30, 2004. The estimates are based on information obtained from the annual Agricultural Survey.

 

These ABS estimates for last season's grain crops are significantly higher than current estimates by the Australian Bureau of Agriculture and Resource Economics (ABARE) and Post's previous estimates. Typically, Post adopts historic figures from the ABS, as they are released, as does ABARE.

 

Mostly, these ABS estimates reflect higher grain area than current ABARE and previous Post figures indicate. For example, the ABS wheat area estimate for 2004/05 is 13.024 Mha, about 600,000 hectares higher than ABARE's current estimate of 12.401 Mha. Similarly, the ABS barley area estimate for 2003/04 is 4.404 Mha, up from ABARE's current estimate of 3.8 Mha; the ABS sorghum area estimate is 761,000 hectares, versus ABARE's current 570,000 hectares.

 

Post's PS&D tables for wheat, barley and sorghum have been revised to reflect these new ABS figures. ABARE is scheduled to release revised crop estimates and forecasts in their next Australian Crop Report due out on Feb. 15, 2005.