Australian Dry Spell Threatens Wheat, Canola Output

Australia’s east coast is expected by the Australian Bureau of Meteorology (BOM) to see below average rainfall through the end of the year, while the remainder of the country is expected to see higher than average temperatures. Such a scenario is believed to compound an expected drop in agricultural output, effecting wheat and dairy the most.

"Having that heat so early is putting crops under stress and it is bad for yields. There is some production risk on the (official) wheat estimates," said Phin Ziebell, agribusiness economist, National Australia Bank.

These projections come at a key point in the crop growing season and follow a period of higher than average temperatures in the country’s south and southeast regions, which have already negatively affected wheat yields for some farmers.

Indeed, South Australia, the country’s largest wheat exporting state recorded its hottest day for the early-October period in over 70 years, stressing the region’s wheat crop at a critical period of development.

These forecasts for hotter, dryer weather for the coming months could mean cuts to Australian output of canola, wheat, and milk, however, it could also mean an increase for beef output as ranchers are forced to send animals to slaughter as pastures dry up.