Australia’s wheat crop will likely surge 38% in 2019-20 versus the year prior’s drought-stricken crop to 23.9 MMT, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said in its first forecast for the coming marketing year. But it says this forecast comes with a big caveat—if farmers receive desperately needed rain.
The three-month forecast calls for more hot, dry weather, which is not promising for farmers looking to sow crops beginning in late April. Back-to-back years of drought have left soils parched across major production regions, and many areas still need rain.
The 2019-20 crop would be roughly in line with the 10-year average for an Aussie wheat crop of 24.4 MMT. ABARES expects nearly a 20% rise in wheat plantings after wheat acreage dropped to at least a 20-year low in 2018-19.
Australia is typically one of the world’s top wheat producers and exporters, but drought the past two seasons cut its wheat exports in half versus the 2016-17 season.
Drought has also encouraged herd liquidation in Australia and that trend is expected to continue. After hitting a record-high in 2018-19, ABARES expects beef production to come in at the third highest level on record in 2019-20. This comes as Australia’s herd notches an all-time low.