Winter crop shrinks

By Geoff Adams

Australia is facing the prospect of a winter crop of just 27.7 million tonnes — the smallest since 2007-08 — as ongoing severe drought conditions continue to take their toll on many of the nation’s main cropping regions, according to agribusiness specialist Rabobank.

This represents a decline of nine per cent on last year’s already drought-diminished grain harvest and is 31 per cent below the five-year average for Australia’s winter crop.

In its Australian 2019-20 Winter Crop Production Outlook: Tough Times, Low Tonnes, the specialist agribusiness bank says while the year will see production increases in some cropping regions — most notably in southern Victoria — this “reflects the extent of last year’s decline rather than significant gains over typical production levels”.

Nor will these increases offset a significant downturn in 2019-20 production prospects for last year’s ‘star player’ Western Australia — with less-than-ideal growing conditions set to see that state’s grain crop hobbled at 11.9 million tonnes, 33 per cent down on last year.

Queensland’s overall grain crop is expected to come in at just below 0.5 million tonnes, down more than 30 per cent on last season and an “eye watering” 72 per cent below the five-year average, the report says.

“There is no sugar coating the fact Australia’s grains industry is suffering the ongoing severe impacts of drought,” report co-author and Rabobank senior grains analyst Cheryl Kalisch Gordon said.

“Conditions this season have proved testing even for Australia’s ‘most valuable player of the year’ last season, WA,” she said.

“After starting the season on limited soil moisture, the Western Australian crop got a good but late start and then kept up with just-in-time rainfall, only to be pulled back by a widespread and severe frost in early September, in between unseasonably high temperatures and low rainfall.

“The east coast largely was a repeat of 2018-19 with a few exceptions.

“Southern Victoria and central Queensland both managed to buck the national trend, with cumulative rainfall and yields reaching near to five-year average levels.”

Dr Kalisch Gordon said for many of Australia’s grain-producing regions, this would be the third consecutive year of severely drought-affected production.

“This means that the tough times are getting tougher and the tail of enduring impacts of the drought is getting longer,” she said.

“And these impacts don’t just apply to cash flow for growers — they also relate to stymied expansion plans, as well as growing soil and resource management challenges.

“Moreover, Australia’s reduced capacity to service international markets over multiple years will severely challenge Australia’s competitiveness in export markets when our exportable surplus grows again.”