December 13, 2004

 

 

Australia 2004-05 Wheat Prod Estimates At 20.5 Mln MT

 

Australia's wheat and barley crops in 2004/05 are forecast at 20.5 million metric tons and 6.5 million tons, respectively. These forecasts are below Post's previous projections, and well under last season's record harvests, according to an agricultural attache report dated Dec. 6 and posted Friday on the Foreign Agricultural Services Web site.

 

Summer-grown rice and sorghum crops (2005/06) are expected to be up from last year, but still substantially constrained due to shortages of irrigation water.

 

WINTER GRAIN UPDATE

 

Production

 

Australia's 2004/05 wheat production is forecast at 20.5 MMT, down 1.0 MMT from Post's previous forecast (see GAIN Report #AS4036, dated 10/26/04), and well under the record 2003/04 crop of 25 MMT. Barley production in 2004/05 is forecast at 6.5 MMT, down 500,000 MT from Post's previous forecast (AS4036), and also well under last year's record crop of 8.63 MMT. Lower expected wheat and barley production in 2004/05 is attributed to dry, hot weather that has reduced yield prospects.

 

Weather during the month of November was somewhat more favorable for maturing grain crops than in October. More near-normal November rainfall in eastern Australia, however, was unable to reverse the damage to grain yields resulting from the earlier adverse weather.

 

November rainfall in most of Western Australia and South Australia was below normal and likely caused further deterioration in yield potential. Limited subsoil moisture and periodic dry, hot episodes have plagued the 2004/05 winter grain crop during key periods during the growing season.

 

Indications of significant quality downgrading due to weather is being reported from many of the key winter grain producing areas. Grain harvest is ongoing and will extend into the first of the new year.

 

The Australian Bureau of Agriculture and Resource Economics (ABARE) has recently released revised crop estimates/forecasts that also indicate a deterioration in prospects for the 2004/05 winter grain crop. ABARE, in their November 30, 2004 Crop Report, forecast 2004/05 wheat production at 20.15 MMT and barley production at 6.2 MMT, versus 22.25 MMT and 7.29 MMT, respectively, in their previous Report (dated September 7, 2004).

 

Other institutions that forecast grain production in Australia have also been lowering their forecasts of the 2004/05 winter crops. AWB Ltd., the monopoly wheat exporter, is currently forecasting 2004/05 wheat production at 20-22 MMT. Australia's major bulk handlers - Cooperative Bulk Handling (Western Australia), ABB Grain (South Australia) and GrainCorp (eastern Australia) - have also lowered their expectations for the 2004/05 winter grain crops.

 

Exports

 

Lower grain exports are forecast for wheat and barley in 2004/05, due to the reduced production expectations. Post forecasts wheat exports in 2004/05 (Oct-Sep) at 15.75 MMT, down three percent from the previous forecast and 12 percent lower than the revised export estimate for 2003/04. Barley exports in 2004/05 (Nov-Oct) are forecast at 3.3 MMT, down eight perc ent from the previous forecast and 45 percent lower than exports in 2003/04. Australia's 2003/04 (Oct-Sep) wheat exports are estimated at 17.83 MMT, based on actual export figures for the 12-month period. Exports to major markets in 2003/04 were sharply higher than the drought-reduced 2002/03 export season. For example, in 2003/04, exports to Indonesia and Iraq doubled, while exports to Egypt increased ten-fold, versus a year earlier. China emerged as Australia's fourth largest export destination for Australian wheat in 2003/04, with 1.4 MMT of wheat exported during the period.

 

NOTES: Winter crop total includes wheat, barley, oats, canola, lupins, field peas, chickpea, faba beans, lentils, triticale, linseed, safflower and vetch. Summer crop total includes sorghum, rice, cottonseed, maize, sunflower, soybeans, peanuts, mung beans and navy beans.

 

ABARE's 2004/05 crop years for rice and sorghum correspond to USDA crop years 2005/06. SOURCE: ABARE, September 7, 2004 and November 30, 2004, Crop Reports.

 

SUMMER CROP UPDATE

 

The outlook for Australia's 2004/05 summer crop season is improved from last year. Notably, relatively favorable recent rainfall in northern New South Wales and southern Queensland has boosted production prospects for cotton and sorghum. Severe deficiencies of irrigation water are expected to sharply curtail output of rice, which is grown in more southern areas of New South Wales.

 

Rice production in 2005/06 is forecast at 594,000 MT (rough basis), up eight percent from last year's harvest. Australia's rice production continues to be severely constrained by a lack of irrigation water.

 

Sorghum production in 2005/06 is forecast at 2.23 MMT, unchanged from Post's previous forecast, and 21 percent higher than in 2004/05. Sorghum for the 2005/06 crop can be planted up until the early part of 2005.

 

NEXT ABARE CROP REPORT

 

The next ABARE Crop Report is due to be released on February 15, 2005, and will include updated estimates/forecasts for grain and other major winter- and summer-grown commodities.