Drought cuts wheat harvest in Australia

Drought in Australia has reduced Australia’s wheat harvest, which is expected to be the third-largest on record this year, Bloomberg reports.

The country is currently undergoing a harvesting campaign that will last until January. According to the Australian Bureau of Meteorology, rainfall in September, a key stage in wheat crop development, was below normal in the southeastern states of Victoria and South Australia. South Australia, in particular, received less than 10 mm of rain, half the long-term average.

The southeastern states account for about a quarter of Australia’s wheat harvest, and both are emerging from a multi-year drought. Heavy rainfall during the winter months has raised hopes for a good harvest. According to the US Department of Agriculture’s forecast released in September, the gross Australian wheat harvest could reach 34.5 million tonnes (34.11 million tonnes last season). The Australian Bureau of Agricultural Resources and Economics (ABARE) estimated the harvest at 33.765 million tonnes in its September report.

However, soil moisture has now dropped, and as temperatures rise, yields could begin to suffer, said James Maxwell, senior manager of agribusiness analysis at Bendigo Bank.

Australia is a major wheat exporter, and while the wheat harvest in Victoria and South Australia typically meets domestic demand, any reduction in yield would limit supply across the supply chain.

“I think production forecasts will be slightly downgraded over the next month or so,” Maxwell told Bloomberg. “For South Australia and Victoria, I’d say we could easily see a loss of half a million tonnes, and in a really bad situation, a million.”

Tags: Australia, wheat, drought, crop forecast