Timely rainfall and the increased likelihood of a La Niña weather pattern, have farmers across much of the country buoyed by the prospect of a bumper crop.
In its latest Australian Crop Update, agribusiness banking specialist Rabobank said the autumn break had seen the Australian 2016/17 winter crop planted into a good soil-moisture profile, raising expectations of a 26.7 million tonne wheat crop – up 10 per cent on last year.
Rabobank grains and oilseeds analyst Ben Larkin said while the start to the season was “perfectly timed” across much of Australia’s cropping belt, there were parts of northern New South Wales and Queensland that remained dry.
“While there has been some rain in this part of the country in recent weeks, it fell too late for many producers to fulfil their winter planting intentions, with some opting to leave their land fallow for summer crops,” he said.
“In contrast, conditions in Western Australia couldn’t be better, with the majority of the state’s cropping regions recording between 100 and 300 millimetres of rain between January and May.”
Mr Larkin said most of southern New South Wales, Victoria and South Australia had also had the rain to facilitate a full planting program.
“That said, we are not expecting to see an increase in the area planted to wheat this season,” he said, “with the increase in national production likely to be driven by yields, which are forecast to average around 2.09 tonnes to the hectare.”
This season, Mr Larkin said ‘price signals’ were a key driver of crop rotations, with barley acreage expected to be down by three per cent, while canola was expected to be up by a similar percentage.
“Western Australia has reported the biggest swing to canola, with planted area in the west expected to be up five per cent. However, despite favourable conditions in Victoria, many farmers have erred on the side of caution after last year’s dry spring slashed canola yields,” he said.
Mr Larkin said despite the decline in the area planted to barley, the national crop was expected to be up by four per cent on last year at 8.79 million tonnes, while canola was expected to surge up to 3.28 million tonnes – an 11 per cent increase.
“We are also seeing a swing towards chickpeas and lentils this season, with high prices spurring an increase in planting,” he said.
Mr Larkin warned that while current conditions, and the expectation of a wetter-than-average year, underpinned forecasts of an above-average crop, much would depend on follow-up rainfall during spring.
“We are still four to five months out from harvest, so while the season is shaping up well, there is still a long way to go,” he said.
In the northern hemisphere, Mr Larkin said prospects of a good harvest were overhanging the global grains market, which remained “awash with wheat”.
“With there being little upside to wheat and barley prices this season, unless there is a significant weather-related event, Australian farmers will be relying on good yields to underpin profit margins this year,” he said.
“As we move through winter and spring, farmers will be looking to the skies and hoping weather forecasts eventuate, as the potential is certainly sitting in the ground.”
Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 115 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading rural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.
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Rabobank Australia & New Zealand
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