Ag Industry, Forecasts

Get set for harvest challenges: ANZ

Australia’s total wheat harvest is expected to rise by 71 per cent in 2020-21, but one analyst is concerned our infrastructure isn’t ready to cope.

 

Australia’s grain industry has some work to do in order to handle what ANZ Bank expects to be one of its biggest ever crops, the latest ANZ grains report says.

ANZ agriculture research director Michael Whitehead says the outlook for the national wheat crop this year remains at 26 million tonnes, despite a number of grain regions experiencing a dryer-than-expected June.


Check out the forecasts of the Australian Bureau of Agricultural and Resource Economics and Sciences here.


“After last year’s drought-hit low of 15.2 million tonnes, this would be an increase of 71 per cent,” he says.

“In addition, on some current estimates, wheat exports are currently forecast to jump by around 90 per cent to 17.5 million tonnes.”

Were that to happen, the forecast increase production and exports would be among the largest year-on-year rises in over 50 years.

“For grain traders and receival site operators, the build up to this year’s harvest will similarly need to focus on ensuring that logistical capabilities and storage capacity are prepared for the scale of crop which could eventuate,” the report says.

“In the record wheat crop of 2016/17, some industry stakeholders were caught unprepared by the scale of the crop, leading to some logistical challenges along the supply chain.

“In comparison, the forecast year-on-year crop increase in 2020/21 will be greater than that year, in both volume and percentage increase.”

The report says it is vital that transport, storage and export processes run as efficiently as possible in order to handle this, ensuring potential issues such as port and shipping access or COVID-19 challenges are planned for in advance.

“While the COVID-19 situation in Australia later this year is difficult to predict, it would be wise to factor in any implications from possible continuing restrictions on cross-border movements between states,” Whitehead says.

The report also says that in the face of substantially higher production, growers would need to evaluate how much could be stored on farms, rather than being sent to grain receival sites, and whether their storage facilities were adequate.

Whitehead says grain growers will need to ensure that their own infrastructure, including silos, coverings and grain bags, are in good supply.

“Growers, contractors and traders will also be looking ensure adequate availability of harvesting and transport machinery, including headers, trucks, and train capacity,” he says.

Despite global challenges, the ANZ report says there is a positive outlook for Australian grain to supply the fundamental bread and noodle needs of markets across Asia, amid a boost to grain from the free trade agreement with Indonesia.

The impact of China’s tariff hikes on Australian barley imports has not yet been felt, ANZ adds, noting that while Canadian farmers have picked up some of Australia’s market share, exporters are treading with caution, noting that Chinese restrictions on Canadian canola exports have provided opportunities for Australian producers. 

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