Australia weather bureau says dry conditions likely to persist for rest of year

File photo showing a dried-up dam that is situated west of the town of Gunnedah in north-western New South Wales, Australia. PHOTO: REUTERS

SYDNEY (REUTERS) - Dry weather across Australia's east coast will linger until 2019, the country's meteorological bureau said on Thursday (Sept 13), extending drought conditions that have hit rural production and threatened the broader economy.

Australia's Bureau of Meteorology said in its latest three-month outlook that there was just a 35 per cent chance that much of the country's east coast would receive average rainfall between Oct 1 and the end of the year.

Dry conditions are expected in the Northern Territory as well, which also has a 35 per cent chance of average rains.

Such weather could pile further pressure on the production of crops such as wheat and corn, while cattle farmers may be forced to increase slaughtering at a time of ample global supply of beef.

"There are parts of the country that really need some rain, without them they could see production estimates come off," said Mr Phin Ziebell, agribusiness economist at National Australia Bank.

"The outlook covers the wet season for Australia's north. Cattle farmers may have to liquidate their herds and then who are they going to sell to? Australia's biggest market - the United States - has ample supplies."

Australia earlier this week cut its forecast for 2018/19 wheat production by nearly 13 per cent as a result of dry weather, which is likely to curtail exports from the world's fourth largest exporter of the grain.

Australia will update its forecast for beef production next week.

With rural output typically accounting for around 3 per cent of Australia's economy, the country's central bank in August warned that the severe drought that has dried out grazing and crop land in the east would cause a potential headwind to the economy.

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