Dry Summer Raises Concerns for Grain Farmers in New South Wales

Grain farmers in New South Wales, Australia's top producing state, are facing concerns due to a prolonged dry and hot summer, according to the Grain Industry Association of Western Australia (GIWA). Despite the challenging conditions, growers are still expected to plant 8.6 million hectares of crops, including 4.96 million hectares of wheat, slightly surpassing the sown crop area of 2023.

The association noted that since October, the weather has been much drier than normal for much of the cropping region, with soil moisture remaining very low in most areas. "There is nothing positive on the horizon, and this is playing on growers' minds," the group said, adding that long-term weather forecasts are not particularly reliable at this time of the year.

Growers are taking a cautious approach as the soil is extremely dry. Dry sowing of canola, lupins, and vetch is underway in many regions, and growers are planning to switch to dry-sowing cereals when they reach around 50% or less of their planned canola hectares sown. The anticipated pasture-to-crop swap of around 10% is likely to be less now, as growers are still holding stock that was earmarked to be turned off.

An increase in both lupin and oat area from 2023 is expected, due to the rundown in stocks and current higher prices. However, the wheat and barley areas could change significantly across the regions as the break to the season lingers, and growers in the northern and eastern regions of the state may opt for fallow over crop as the break to the season pushes back.

Why this matters: The dry conditions come at a time when global wheat prices are near their lowest since 2020, primarily due to increased exports from Russia. However, any disruption to Australia's wheat production could have a significant impact on global prices, given the country's role as a major supplier.

The concerns come as any threat to wheat production in Australia, a major supplier, could bolster global prices that have fallen near the lowest level since 2020 amid bumper exports from top shipper Russia. The International Grains Council has revised its global wheat stockpile estimates for the 2024-25 season, suggesting tighter supplies may be on the horizon.

Key Takeaways

• Grain farmers in Australia's top producing state face concerns due to dry, hot summer
• Growers plan to plant 8.6M hectares of crops, including 4.96M hectares of wheat
• Dry sowing underway as soil moisture remains very low, long-term forecasts unreliable
• Increase in lupin and oat area expected, wheat and barley areas may change
• Disruption to Australia's wheat production could significantly impact global prices