Australia: Australia’s planted crop area predicted to reach record 23.83 mln ha this year

Increased planting by Victorian and Queensland grain farmers has set Australia up for a third consecutive bumper harvest amid a global supply crunch that is raising fears of a food crisis, the Australian Financial Review reported on May 31.

In its 2022-23 winter crop outlook report, agri-lender Rabobank predicts this year’s planted crop area will reach a record 23.83 million hectares, up nearly 1 per cent on last year’s record 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, albeit at the expense of barley, oats and pulses, partly reflecting China’s tariffs on barley and lower prices earlier in the year.

Winter plantings – which are under way – are expected to be 10 per cent and 8 per cent higher than last year in Victoria and Queensland, respectively, while Western Australia, South Australia and New South Wales are tipped to be slightly lower.

Rabobank said though it was too early to tell if the record planting would deliver another record year of production, it boded well for another above-average grain harvest after last season’s 62 million tonnes worth about $26 billion.

″Excess carryover from 2021-22, together with another above-average harvest and strong global demand, means ... Australia could export around 26 million tonnes of wheat again in 2022-23, almost 50per cent above the 10-year average and more than 50 per cent above the five-year average,″ RaboResearch senior commodities analyst Cheryl Kalisch Gordon said.

Separately, ANZ Bank analysts warned global grain stocks were being depleted rapidly following poor harvests due to bad weather from La Niña, and that increased planting and getting more grain out of the Black Sea region supplied by Russia and Ukraine was key to alleviating the food crisis in the short term.

The bank said the war could further increase the 660 million people the United Nations expected to still be facing hunger in 2030.

“The level of global inventories looks precarious, with the exception of China, as it currently holds much of the world’s grain reserves,” said ANZ Commodity strategist Soni Kumari, adding that China had been stockpiling soft commodities in recent years.

“Food crisis is triggering food protectionism, which is worsening supply disruptions and pushing soft commodity prices higher.

“Trade restrictions have also been imposed on fertilisers by Russia and China [and] higher energy and other input prices are further adding to producers’ woes.”

Ukraine and Russia account for a combined 20-30 per cent of global exports of several soft commodities, including wheat and corn, and the conflict has kept prices high. India, one of the world’s largest wheat producers, recently also banned most exports of the grain.

In good news for farmers, Rabobank predicted the prices of farm inputs, such as fertilisers, have peaked.

It added that global stocks of grains and oilseeds would move even lower in the coming year, supporting elevated global prices through 2022-23.

It said even without the Russia-Ukraine war, markets would be tight, meaning prices would remain above average even if there was a ceasefire.

However, Dr Kalisch Gordon said local prices for wheat, barley and canola would continue to trade at a discount to global prices primarily because of the large amount of local supply following record production and supply chains running at full capacity.

The bank expects Australian premium white wheat track prices to trade at an average above A$400 a tonne over the balance of the year.

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