March 8, 2010

Western Australia frets over grain output on drought fears

Drought concerns have re-emerged in Australia's biggest grain-growing state, after very dry and hot conditions in some areas set summer records.

Rainfall rankings in other parts of the state, Western Australia, made the summer among the driest 10%, with only southern areas seeing significant rain last month.

A continuation of the dry conditions into the southern hemisphere autumn could see progressive cutbacks in the areas of grain sown for the 2010-11 harvest, a report from the state's farm ministry said.

Apart from southern areas near the coast, there have been insufficient summer rain in most of the wheat-belt to build stored soil moisture, said the report.

The area eventually sown would be "heavily responsive" to soil moisture levels, the ministry said, noting that farmers, for whom fertiliser costs as well as grain prices have fallen, had been hoping to plant similar acreages to last year.

In 2009-10, farmers produced 11 million tonnes of grain, with wheat deliveries hitting 7.5 million tonnes, the report said.

Abare, Australia's national commodities bureau, pegged the Western Australia wheat crop at 8.25m tonnes, approaching 40% of the country's total production.