National crop production forecast to drop

TOTAL Australian crop production for 2017/18 is forecast to be around 30 per cent lower than last season’s record levels, and to dip 10 per cent below the five-year average, according to Rural Bank’s Australian Crop Annual Review 2017.

In a substantial year-on-year swing, poor early season weather conditions across most of the country’s cropping regions – combined with a drier than normal winter – has limited yields significantly, and below average production is now expected in Western Australia, Queensland, New South Wales and South Australia.

The new report – launched by specialist insights team Ag Answers – provides producers and industry with a concise analysis of 2017/18 national and world crop production estimates, seasonal conditions, prices, demand and the financial performance of Australia’s cropping farms.

Rural Bank general manager of agribusiness Andrew Smith said that despite a drier than normal winter and below average production levels now expected in many regions, rainfall in July and August had salvaged some potential for the 2017/18 season.

“Rainfall in the second half of the year has opened the door to the prospect of farmers achieving average yields in some areas such as southern Western Australia,” Mr Smith said.

“Favourable weather conditions over the next two months will be essential if production levels close to average are to be delivered.”

At a state level, Victoria is the only state in which above average crop production is expected, with the Wimmera and Mallee regions set to be the nation’s top performers this season.

National wheat, barley and canola production is all forecast to be significantly lower than last season, with decreases of 35 per cent, 37 per cent and 16 per cent respectively, now expected.

Despite lower crop production in Australia, high ending stocks overseas mean that the likelihood of a large rise in prices in the short to medium term is unlikely.

On the export front, with crop production levels down by almost a third when compared with 2016/17, and prices for major crops also down, the value of exports is expected to be lower in 2017/18.