Heavy Rains Put Australia’s Wheat Crop at Risk

Abundant rainfall is boosting yields for Australia’s wheat crop, Gro’s model shows. But the high levels of precipitation are also likely to substantially reduce grain quality, depressing production of milling wheat and driving an abnormally large percentage of the crop to animal feed uses. 

A shortfall in Australia’s milling wheat production would have consequences around the globe, as worldwide wheat supplies, excluding China, are at their tightest level in more than a decade. Australia is the largest wheat producer in the Southern Hemisphere, and it is often the world’s fourth-largest exporter of the grain. Argentina is the No. 2 southern wheat producer, and its crop is under pressure from drought brought on by La Niña, as Gro wrote about here. 

Precipitation totals in Australia’s wheat growing regions are the highest in more than 20 years, driving soil moisture levels far above historical norms, as shown in this display in Gro’s Climate Risk Navigator for Agriculture, weighted for acres planted to wheat. GFS forecasts shown in the Navigator app indicate more rain is on the way in coming days. 

Heavy rains have brought flooding in the big wheat growing states of Victoria and New South Wales, which could delay harvests that are just getting underway and reduce final harvested acreage. Gro’s Observed Flood Index, seen in this display, shows the latest spikes in the states’ inundated wheat fields. The Index, which updates daily, identifies potential flooding and flood extent worldwide.

Gro’s machine-learning Australia Wheat Yield Forecast Model is predicting near-record yields for the current crop. In a normal year, roughly 5% of Australia’s wheat crop goes for animal feed because of its lower quality. But there are concerns this year that as much as 20% of the crop could be downgraded to feed quality. 

That has widened price spreads between premium and standard wheat grades. At Australia’s Port Adelaide, the premium/standard spread in FOB export prices is currently more than five times wider than at this time last year, as shown in this Gro display. 

Wheat, Australia’s largest cereal crop, is grown largely in the states of Western Australia, South Australia, Victoria, and New South Wales and is harvested beginning in November. The La Niña global weather pattern, which is back for a third consecutive year, typically results in above normal rainfall in Australia, even as it brings dry conditions to parts of North and South America, as Gro wrote about here.