FOCUS ON AUSTRALIA
After three consecutive record crops and the highest-ever gross value for agricultural production, Australia is expecting smaller crop production in 2023-24. Total winter crop production is forecast to drop 33% to 46.1 million tonnes. Summer crop production is forecast to fall 27% to 3.8 million tonnes. Grains, oilseeds, and pulses have been the fastest-growing export segment, growing at an average annual rate of 10% in value terms between 2002-03 and 2021-22, followed by other horticulture and meat and live animals.
The area planted for winter crops fell year-on-year but was still historically high at 23 million hectares. Wheat production is forecast to fall 37% to 25.5 million tonnes, barley production is forecast to fall 24% to 10.8 million tonnes. Canola production is expected to drop 33% to 5.5 million tonnes. The area planted for summer crops is down 21% to 1.2 million hectares, with production estimates also down 27% to 3.8 million tonnes. Sorghum is forecast to fall 45% to 1.5 million tonnes due to dry conditions and declining soil moisture levels during the early planting window. In drought conditions, the beef cattle industry ramps up the volume of cattle in feedlots. There was a spike in feedlot usage in June, and the FAS said this was likely to continue well into 2023-24, prompting higher feed grain demand.
Australia has more than 50 wheat export destinations, with five consistently big customers that have accounted for 55% to 70% of all exports. Australia is in a unique position to capitalize on key Asian export markets given its proximity to the region, ABARES said. Australia’s relatively low exchange rate also supports the value of exports in the short term as most agricultural exports are contracted in US dollars. Due to the decrease in winter and summer crop production, wheat exports are expected to fall 35% to 20.9 million tonnes while canola is expected to be down 26% to 4.2 million tonnes. Barley exports are estimated down 24% to 5.8 million tonnes and sorghum is expected to fall by 16% to 2.4 million tonnes. The overall value of Australian crop exports is forecast to fall by 22% to A$39.5 billion.
(Link: WorldGrain)
