September 16, 2011


Australia's winter grain production to reach record levels



Australia's winter grain production is expected to reach 41 million tonnes in 2011-12 because of good moisture levels and favourable growing conditions, according to Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES).


The upward revision from June was on the back of improved conditions and outlook for Western Australia (13,192 tonnes), South Australia (8,171 tonnes) and Victoria (6,438 tonnes), which will offset forecast production declines in Queensland (1,876 tonnes) and New South Wales (11,274 tonnes). The growing conditions in Western Australia have improved dramatically since last year, and crop production is expected to rise 78% with 25-100mm of rain in each month of winter driving a predicted improvement in yields.


However, compared to 2010-11 total production for 2011-12 is forecast to be back 2% - albeit still the fourth largest crop on record. Indeed, the forecast declines in New South Wales and Queensland in 2011-12 are compared to the very large harvest in 2010-11, which was also significantly disrupted by heavy rain at harvest time. Of the major crops, wheat production is estimated to be 26.2 million tonnes, slightly down on 2010-11.


Although total crop yields for 2010-11 were the second largest since 1998-99, grain prices still surged throughout the year. Average fiscal year prices for Darling Downs wheat at AUD244 per tonne (US$252.2) and Riverina wheat at AUD225 per tonne (US$232.6) both jumped 12% year on year, despite the near record production levels.


The higher grain input costs continue to challenge feedlot operators, who are already dealing with a sluggish Japanese market and relatively high feeder cattle prices.

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