March 16, 2007

Australia grain production seen to recover in 2007/2008
 

Grain production across Australia is forecast to increase substantially in 2007/2008, to 38.4 million tonnes, according to the March edition of Australian Commodities (Australian Bureau of Agricultural and Resource Economics). Grain production in 2006-07 is estimated at only 15.7 million tonnes, due to the extent and severity of the drought.

According to ABARE, much of the increase in production for 2007-08 relies upon the assumption that the return to average seasonal conditions during autumn will allow for the increased sowing of winter crops. Wheat production is forecast to increase from 9.8 million tonnes in 2006-07, to just below 25 million tonnes in 2007-08, while barley production is forecast to jump 138 percent, to 8.87 million tonnes.

The prospect of increased feed grain supplies in the coming year will be welcome news for the Australian lot feeding industry, after prices jumped in 2006-07 due to significantly reduced supplies. With the increased supplies, grain prices are expected to fall back in 2007-08, with feed barley prices forecast to decline 25 percent, to A$202/tonne.