High nitrogen fertilizer prices push Australian farmers to shift from wheat to barley

Rising nitrogen fertilizer prices due to developments in the Middle East are encouraging Australian farmers to reduce wheat acreage in favor of barley. Barley requires less nitrogen, making it more economically attractive amid increasing production costs. This shift in planting patterns could result in a record barley harvest in Australia in the MY 2026/27.

Australia’s barley production could reach a record 17.7 mln tons, exceeding the official USDA estimate of 17.1 mln tons. Barley exports are forecast at 13 mln tons, potentially marking a second consecutive record export season. Increased Australian supplies are expected to intensify competition in the global feed grain market.

Meanwhile, Australia’s wheat production in 2026/27 is estimated at 32 mln tons, compared with nearly 36 mln tons in the previous season. This forecast is 1 mln tons above the official USDA estimate. Favorable weather conditions in southern Australia are supporting yields, while production prospects in Western Australia have deteriorated due to insufficient rainfall. Despite the smaller harvest, wheat exports could reach 25 mln tons, compared with the official forecast of 23.5 mln tons.

Argentina is also expected to produce substantial volumes of wheat, with output forecast at 21.6 mln tons and exports at 15.5 mln tons. Together, Australia and Argentina could supply 40.5 mln tons of wheat to the global market in 2026/27. The increase in exportable supplies from the Southern Hemisphere is adding further pressure on global wheat prices.

In the European market, Euronext wheat futures fell by more than 3.2% at the beginning of the week, while Russia is increasing exports through its Baltic ports. Milling wheat in Constanta was quoted at €233/t DAP. Large export volumes from Australia and Argentina could limit a recovery in global wheat and barley prices, although future trends will depend on weather conditions, logistics costs, and demand from major importers.

Tags: wheat, Australia, barley