Wheat and barley prices show no drought premium as dry spell continues

Farmers say they are not seeing any signs of drought premiums for their grain despite the dry conditions.

Farmers and analysts say despite dry conditions in Victoria and southern NSW, wheat and barley prices have not attracted any drought-related premiums

During the 2018-19 drought, there was a premium of as much as 80 per cent, or up to $100 a tonne, above international values, in domestic markets for grain.

New data from the NAB Rural Commodities Wrap for May 2025 points to stability in pricing for wheat and barley.

The report stated Australian wheat prices had continued to track “broadly sideways” and have trended near $330 a tonne since September. Barley also remained steady with prices of $300 a tonne despite volatility in global markets.

Episode 3 analyst Andrew Whitelaw said there was no drought premium evident for wheat or barley yet but he didn’t rule out the possibility of one emerging in late June or July.

“If we look back at the last major drought, there were massive premiums of 80 per cent above overseas values,” he said.

In the 2018-19 drought prices for wheat were as high as $400 a tonne according to the Australian Bureau of Agricultural and Resource Economics and Sciences.

However, 2025 was considered different, with northern NSW, Queensland, and Western Australia anticipated to make up any shortfall.

Birchip farmer John Ferrier said at this point in time there were not increases in pricing at a farm gate level.

“Traders have their stock covered, and there is no certainty of drought premiums,” he said.

Mr Ferrier said it was still dry in his region, and there was a lot of crop in the ground that had not emerged.

Ashley Fraser of Rutherglen says conditions are still dry. Picture: Yuri Kouzmin

In the northeast of Victoria, Ashley Fraser of Rutherglen said there had been increases for canola. However, nobody was willing to commit at the moment.

“It is a hard market to pick at the moment,” he said.

Mr Fraser said 30mm of rain fell at his property about 10 days ago, which had helped to improve the outlook, but more was still needed.

Jason Mellings of Carron says prices for barley are solid.

Jason Mellings of Carron said prices for barley were solid with offers of around $350 a tonne on-farm.

“Barley is hot property for sheep and dairy farmers and is being driven by supply and demand,” he said.

“As for wheat, I think it will start to heat up a little bit because of the dry conditions.”

Mr Mellings said he had seen worse prices before, however, an extra $20 a tonne for wheat and barley would be welcomed right now.