​Adverse Weather Impacts Australia's Wheat Harvest

The recent onslaught of heavy rain in southeastern Australia has dealt a blow to the wheat industry, potentially reducing production by over 100,000 tons and transforming up to 1 million tons of milling wheat into lower-quality feed grain, according to analysts.

Calistemon, CC BY-SA 4.0, via Wikimedia Commons

Australia, a significant global wheat exporter, finds itself amid this year's harvest, which has been marred by unexpected challenges. Earlier in the year, scorching temperatures and scarce rainfall had already led to a reduced production forecast, with estimates dropping from approximately 40 million tons last year to a range of 25-28 million metric tons. However, the expectation was for high-quality wheat despite the lower volume.

November, however, has taken an unexpected turn with increased precipitation. In just 24 hours between Tuesday and Wednesday, parts of New South Wales experienced a deluge of more than 200 millimeters (7.9 inches) of rain, while parts of Victoria received over 80 millimeters, as reported by Australia's weather bureau. A severe weather warning for continued rain and damaging winds remains in effect for areas in the southeast, where the harvest is currently in full swing.

The heavy rain has created significant challenges for farmers. Large machinery is hampered by the saturated ground, and crops left in fields are at risk of developing fungus or sprouting prematurely. Andrew Whitelaw from Episode 3 consultants noted, "Farmers are parked up. You can't harvest a paddock with saturated ground." Estimates suggest that anywhere from 50,000 to 130,000 tons of wheat could be lost, with half a million tons downgraded to lower quality.

Ole Houe at IKON Commodities expressed concern that up to 100,000 tons could disappear entirely, with an additional 1 million tons potentially being degraded from milling wheat to feed wheat. Rod Baker at Australian Crop Forecasters, while slightly more optimistic, acknowledged that up to 50,000 tons might be lost, and 500,000 tons could be downgraded to feed quality. All analysts emphasise that these figures are subject to change and heavily reliant on the weather conditions in the coming days.

"It's really hard to quantify until we start getting harvest results in," explained Baker, underlining the uncertainty surrounding the situation.

While these challenges are impacting the wheat sector, the rain is expected to benefit other Australian summer crops, such as cotton and sorghum, providing some relief to farmers. Vitor Pistoia at Rabobank commented, "Before this rainfall, farmers in northern New South Wales and Queensland were really scratching their heads about whether to put in sorghum. Now they have more confidence."

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