Australia cuts crop production forecasts as risk of El Nino rises

FILE PHOTO: Crops are seen in a barley field at a farm near Moree, an inland town in New South Wales, Australia October 27, 2020. REUTERS/Jonathan Barrett/File Photo

SYDNEY (Reuters) – Australian winter crop production is set to fall from record highs, according to the country’s agricultural department, as forecasters predict drier weather after three years of record rainfall brought on by back-to-back La Nina weather patterns.

Total Australian winter crop production is forecast to fall by 34% to 44.9 million tonnes in 2023–24, around 3% below the 10-year average to 2022–23 of 46.4 million tonnes, according to the June crop report from the Department of Agriculture, Fisheries and Forestry.

Wheat and barley production will drop by 34% and 30% to 26.2 million tonnes and 9.9 million tonnes, respectively. Both figures are below the 10-year average. Canola is forecast to fall 41% to 4.9 million tonnes but remain 15% above the decade average.

Yields are falling due to the high chance of below average rainfall across cropping regions between June and August, with the potential for the El Nino conditions associated with drier weather, according to the report.

The El Nino weather pattern and the dry weather it causes are threatening food producers across Asia, with Australian wheat and palm oil and rice production across southeast Asia at particular risk.

Area planted to winter crops will fall but remain historically high at 23.3 million hectares, with wheat and canola plantings down by 2% and 11%, respectively. Barley plantings are set to rise 4% to 4.3 million hectares because it can better handle drier conditions.

Lower yields will pressure the total value of agricultural production, which is forecast to fall by 14% to A$79 billion ($52.08 billion) in 2023-24, still the third highest on record, according to the June agricultural commodities report put out by the same department.

Agricultural exports are also forecast to tumble from record levels, falling 17% to A$65 billion in 2023-24 due to lower production and easing global prices for grains and oilseeds.

Summer crop production, which includes sorghum and cotton, is estimated to fall 8% to 5.1 million tonnes over the same period, but remain well above the decade average.

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