This forecast remains a cautious one, as while most grain-growing regions of Australia experienced a good start to the season, a number saw little or no rain throughout June. With four or five months until harvest, these regions will need to see a return of good moisture to see crops reach potential.
On the back of production outlooks, grain exports are also forecast to see a major turnaround from last year, jumping 90 per cent to 17.5 million tonnes. This would see wheat exports accounting for around 67 per cent of Australia’s total production, in line with the average proportion of the last decade.
On its own, a strong recovery in production is definitely good news for the sector. That said, swings of these proportions in both production and exports also come with impacts which need to be factored into industry planning.
To put it in proportion, a 42 per cent increase in national wheat production would be the second largest increase in 24 years. For exports, not only would a 90 per cent rise on the previous year also be the second largest in almost a quarter of a century, it would also be the fourth largest year-on-year rise in at least the last 50 years.
A lot of growers would have seen their wheat production levels fall for around six of the past seven years so a rise of this volume will require a number of important strategic operational decisions. Many growers will need to evaluate what proportion of grain may be stored on farms, rather than sent to grain receival sites, and ensure they have adequate storage facilities should this eventuate - whether in silos, bunkers or other options.
Operationally, with prices for cattle and sheep continuing to remain at strong levels, a number of grain producers will also be evaluating the balance of stock versus crop acreage in mixed farming operations.
Among a number of other considerations, these operations will be balancing in the level of feed grain stored on-farm and how this will tie in with budgeting forecasts on possibly either buying feed or selling grain.