West Australia wheat at risk of 2010-style decline

August 22nd, 2012

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Category: Grains

(AgriMoney) – The wheat crop in Australia’s top growing state faces a make-or-break month which, if it does not bring sufficient rains, could see the harvest near-halve from last year’s bumper levels.

A spell of rains in Australia, the southern hemisphere’s top wheat exporter, is “receiving much attention” for its potential for stabilising a crop in Western Australia hurt by “one of the driest Julys on record”, Australia & New Zealand Bank said.

The Western Australian wheat crop, which hit 11.7m tonnes last year, is already looking like falling to 8m tonnes, and “could quickly drop to 6m tonnes if adverse weather conditions persist into September”.

“Production prospects are delicately poised,” Paul Deane, ANZ senior agricultural economist, said.

‘Not a lot of gas left’

Western Australian farmer Aaron Edmonds said that crops were looking “surprisingly good” given the lack of rainfall.

Much of the state’s southern western grain belt has suffered a “severe deficiency” in rainfall since the start of April, with some areas receiving their lowest ever precipitation, according to official meteorologists.

Mr Edmonds told Agrimoney.com: “If you tot up the rainfall we have had, there is not a lot of gas left under the crops,” posing the risk of rapid deterioration.

“We are just at that point where, without rain, we could be looking at a result in line with 2010,” when output fell to 5.0m tonnes, according to Australia’s official Abares commodities bureau.

Abares is currently forecasting an 8.7m-tonne Western Australian crop this year.

‘Yield-critical phase’

However, at Texas A&M University, farm economist March Welch flagged the threat to hopes for rain posed by the El Nino weather pattern which many meteorologists believe is beginning.

“The forecast for August to October, when the wheat crop will be filling heads and reaching maturity, is for a drier weather pattern to develop over eastern areas of the country, consistent with the emergence of an El Nino weather phenomenon,” Dr Welch said.

“Late August through September is the yield-critical heading phase for Australian wheat,” he added, saying that Western Australia had “borne the brunt of this year’s drought”.

Export prospects

ANZ added that, even if the wheat forecast does come in at 6m tonnes, Western Australia may still be able to maintain exports close to the forecast 8.5m tonnes for the 2011-12 marketing year, which in Australia ends next month.

“Western Australia will still have record to stocks to carry into the next season,” Mr Deane said.

“This provides a significant buffer to export availability.”

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