Australia may produce a third consecutive bumper winter crop harvest in 2022–23, according to Rabobank
Rabobank says in its 2022/23 Winter Crop Outlook that this year’s total planted crop area is forecast to reach a record 23.83 million hectares.
This would be nearly one per cent up on last year’s record planting and 11 per cent above the five-year average. It includes a 1.4 per cent lift in wheat and a record canola planting, up 20.9 per cent on last year, albeit at the expense of barley, oats and pulses.
This forecast boost in Australian production comes at a time of poor production and export constraints for many countries around the world, prompting the United Nations to warn that the world is on the brink of a food crisis.
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Due to high wheat and corn prices, feed barley will be in high demand
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Locally, the bank says, “hopes are on” another large winter crop to allow Australian farmers to secure good margins in the face of high costs for inputs including fertiliser, fuel, freight and agrochemicals.
Across the states, the report says, winter plantings are forecast to be up on last year by 10 per cent in Victoria and eight per cent in Queensland. New South Wales, South Australia and Western Australia are expected to see small contractions in planted area – of two per cent, one per cent and one per cent, respectively.
Production
Combined with the favourable seasonal outlook for the year ahead, Rabobank says, the forecast record national winter crop planting – currently underway across the country – should see Australia on track to deliver another above-average grain harvest for this season.
Report co-author, RaboResearch agricultural analyst Dennis Voznesenski says that while the outlook is for another bumper harvest, it was too early in the season to tell if the record planting would deliver another record in production this year.
“At this point in time, until the crop is more progressed, and we can see if there are any surprises in store, we have been conservative in our production volume estimates. In particular we’re mindful of the slow planting progress in NSW and the corresponding decline in yield potential with late planting, as well as overly wet growing conditions,” he says.
Based on current plantings and slightly above-average yield expectations, the bank estimates Australia will be on track to deliver total wheat production of 32.5 million tonnes (down 10 per cent on last year), barley of 11 million tonnes (down 18 per cent) and canola of 5.8 million tonnes (down nine per cent).
Exports and market
This would see Australia with “well above-average export potential again in 2022/23”, the outlook says.
Report co-author, RaboResearch senior commodities analyst Cheryl Kalisch Gordon says a prospective third consecutive bumper harvest would mean Australia would be “well placed to help support global wheat needs in 2022/23”.
“Excess carryover from 2021/22, together with another above-average harvest and strong global demand, means we expect Australia could export around 26 million tonnes of wheat again in 2022/23, almost 50 per cent above the 10-year average and more than 50 per cent above the five-year average,” she says.
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Rabobank analysts Cheryl Kalisch Gordon and Dennis Voznesenski
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Rabobank says Australia is also forecast to deliver an impressive barley and canola export program in 2022/23, albeit down on last year. The bank currently sees barley exports of 7.5 million tonnes (down 16 per cent on the previous year) and canola exports at 4.5 million tonnes (down six per cent).
For chickpeas and niche grain and pulses, the report says, ongoing issues with the availability, reliability and cost of container freight – which have been further adversely impacted by China’s ongoing COVID-19 lockdowns – are expected to continue to challenge boxed freight and constrain exports.
Global stocks of grains and oilseeds are set to remain low and move lower in the coming year, Rabobank says, supporting elevated global prices through 2022/23.
The bank expects global wheat prices to continue trading near current levels with Chicago Board of Trade (CBOT) wheat to trade around USc 1100 per bushel out to the first half of 2023. But it expects prices to be extremely volatile in this higher range, as markets react to news of changes in crop prospects and what can ultimately be exported from Ukraine, Russia and India.
Strong demand for feed barley as a substitute for high-priced wheat and corn feed should keep global barley consumption near or above last year’s levels and be supportive of global prices, Rabobank says. For canola – which sits in the broader edible oil market – prices are also expected to remain strong.
Local prices for wheat, barley and canola are expected to remain historically strong, Rabobank says, albeit continuing to trade at a discount to global levels.
When it comes to farm inputs, prices for most are believed to have peaked, but are expected to remain elevated due to the high cost of production and freight, as well as the sanctions on Russia and Belarus, according to the Rabobank outlook.