USDA predicts decline in Aussie wheat production

The US Department of Agriculture has forecast Australia’s wheat contribution to the global pool to fall by 10 million metric tonnes in two years.

Wheat production is set to tip 786.70 million metric tonnes globally for 2023-24, with Australia’s share forecast to fall.

That’s the outlook from the United States Department of Agriculture World Agricultural Supply and Demand Estimates for April.

Farmers and grain traders are looking to the world modelling to see how it might affect prices for the upcoming crop.

In 2021-2022, Australia contributed 36.24 million metric tonnes of wheat to the global pool. According to the USDA report, this projection has fallen to 26 million metric tonnes for 2023-2024.

However, Australia’s production outlook has remained the same since the last projections were recorded by the USDA a month ago.

In terms of global production, China remains a key contributor, accounting for 136.59 million metric tonnes.

Russia was forecast to produce an estimated 91.50 million metric tonnes, the US 49.31 and Canada 31.95.

Andrew Weidemann, Rupanyup, in a paddock of canola stubble. Picture: Dannika Bonser

Rupanyup farmer and Grain Producers Australia southern director Andrew Weidemann said the dry conditions in Western Australia and northern NSW during the growing season had affected overall production levels.

“Those two areas could have accounted for another 10 million tonnes,” he said.

He added that Victoria’s Western District struggled with waterlogging, and a higher proportion of red wheat rather than white hard wheat was grown there.

Mr Weidemann estimated prices to stay relatively stable, with the current world production estimate at around 780 million tonnes.

“Any production glitches are going to stir up those buyers who can afford to buy grain,” he said.

In addition to the seasonal conditions affecting Australia’s overall output, Mr Weidemann said there was a shift to other crops in some regions.

“Lentils are clearly being taken up as a crop of choice in parts of Victoria,” he said.

“It’s quite clear that there has been a lot of acreage in the Mallee that was sown to lentils that might have otherwise been growing wheat or barley.”

A drop in the Australian dollar has helped to add to the prices paid for grain domestically.

On Wednesday, the Australian dollar was at US0.65c, and as a result, there was a slight increase in prices paid for wheat.

Commodity forecaster Mecardo reported that the US1.5c drop in the dollar had helped to add $7/tonne to the wheat price.

Currently, wheat is trending at $341/tonne at port in Victoria, canola at $649/tonne, and lentils at $985/tonne.