CM – Outlook for the Australian grain market: Wheat production and yields are expected to decline, the disruption of barley exports is set to persist



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By Jane Byrne

May 04, 2021
– Last updated on
May 04, 2021 at 14:27 GMT

Related tags:
feed barley, pasture, drought

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However, production is still expected to decline from last year’s record-breaking wheat crop and a barley crop that was the second largest in history. According to a recent USDA GAINS report, wheat production in MY 2021/22 is projected at 27 million tons (MMT) and barley at 10 MMT.

And while total grain acreage is expected to be large, yields are expected fall to more typical levels than last year’s exceptionally high yields.

Wheat and barley consumption in Australia is expected to remain at last year’s levels but much lower than levels reached during the drought The authors find that the need for complementary feed was much higher.

Because of the price differences, the use of feed has shifted to barley and away from wheat, they added.

Wheat and barley exports are expected in the forecast year of a historically high volume due to the forecast of a decline in production. « Although Australian feed barley exports have diversified away from China and into Middle Eastern markets in 2020/21, export competition for these markets is expected to intensify. »

The total area of ​​wheat production in Western Australia will according to the Grains Industry Association of Western Australia (GIWA), due to the reduction in barley acreage towards wheat and canola. This development is linked to the mood of producers in connection with the imposed tariffs. Barley imports to China of 80.5%.

“This sentiment is likely to have an impact on producers in South Australia, as both countries are heavily dependent on the export market for barley are. The tariff was introduced on May 18, 2020, by which time most of last year’s winter crop had already been planted, leaving growers little room to adjust their planting schedule. The barley industry is aware that in 2020/21 exporters have been able to diversify exports of feed barley from China and especially to the Middle East markets. However, some of this shift has been fueled by supply issues and policy choices in competitor countries near those markets. .

« With Chinese tariffs expected to last for five years, it is expected that export demand for Australian barley will continue to be disrupted. » .

In the eastern states of Australia, Chinese tariffs are expected to have less of an impact on growers’ growing programs as most of the barley grown in these states is used for domestic malting and forage, the review said / p> Another factor driving a strong wheat year is persistently high world wheat prices. This price is supported by strong global feed grain prices, particularly corn and soybeans in the context of decreased global feed grain stocks.

Australian sorghum production is expected to decline slightly in 2021/22 after falling after a bad one in 2020/21 Production recovered sharply in the previous drought-affected year. However, sorghum exports are expected to increase in 2021/22 due to larger opening stocks and limited expected growth in domestic demand.

The USDA FAS Canberra report predicts that Australian wheat consumption in MY 2021/22 is 7.5 MMT, which is the estimate of MY 2020/21.

Changes in feed consumption are the main driver of total wheat consumption in Australia, with the wheat used for milling remaining relatively stable from year to year.

In a typical year, domestic food consumption of wheat is only about one-tenth of total wheat production in Australia. Wheat feed demand spiked during the 2018 and 2019 drought in the eastern states, peaking at 5.7 MMT in MY 2018/19 due to strong demand from the livestock industry. That forage demand has since declined to more typical pre-drought levels of around 4 MMT, the team said. « The recent drought had a significant impact on pasture production across Australia. This resulted in strong demand from cattle and milk producers and, to a lesser extent, sheep producers for grain for livestock feeding on the farm. The drought also had a major impact on the number of cattle completed via feeding grounds and therefore increased feed demand from this sector. .

« Since the drought at the beginning of 2020, pasture production conditions have improved significantly above average in many areas. This has resulted in a significant reduction in the demand for grain feed on the farm and a reduction in the number of cattle that are fed into feeding grounds, thereby also reducing their need for grain feed. “

The Australian poultry and pig farming industry has also become a major consumer of wheat and other grains. However, grain consumption through these seconds remained relatively stable during the drought and the post-drought period, the authors commented MMT corrected downwards. This revision is based on reducing the demand for forage after the drought. “.

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Related topics:
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