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September 20, 2010

 

Australia's east coast to drive grain production higher

 

 

Excellent yields are currently forecast for east coast regions in Australia on the back of a wetter season, while this will be offset by a smaller harvest in Western Australia (WA).

 

Despite this, the 2010-11 harvest is still forecast nationally to be the third largest ever at 40.7million tonnes, 16% higher than a year earlier, according to official commodities bureau Abare's latest Australian Crop Report.

 

Winter grain production is tipped to rise 3% in Southern Australia (7.7 million tonnes) and 8% in Victoria (6.7 million tonnes), while New South Wales is on track to record its largest harvest at 14.5 million tonnes - a 93% increase on last year, underpinned by strong plantings and even stronger yields. Potential downsides to the east coast harvest exist in the form of locust infestations and yield loss due to stripe rust. However, Abare expects the impact of these to be localised rather than broad, with a small impression on aggregate production.

 

The WA harvest is forecast at 9.7 million tonnes in 2010-11, back 22% on a year earlier. The total area given to cropping fell 2% to 7.5 million hectares this season, reflecting the poorer price outlook at the time of sowing. However, the biggest driver of performance has been the dry season to date, with most wheat belt regions in need of good spring rainfall to achieve even average yields.

 

Grain prices continue to improve, with feed barley, feed wheat and sorghum currently averaging 39%, 37% and 31%, respectively, higher than just three months earlier. Many grain growers now find themselves in the fortunate position of facing high yields and higher prices, with the improved price outlook spurring summer plantings.

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