Australian farmers brace for muddy wheat harvest as rain pummels east

Local grain grower Tom Green in his water-damaged wheat crop around 15km south-west of Forbes, Australia, on Oct 12, 2022. PHOTO: EPA-EFE

VICTORIA – Australian wheat farmers are preparing to gather a third straight bumper crop, but with plenty of heavy rain expected in the east of the country, growers there are bracing for a grueling and muddy harvest.

Wet conditions had earlier buoyed the outlook for wheat production in the nation, one of the world’s top exporters, with the government expecting more than 32 million tons this year after a record 36.3 million tons last season.

Yet, timing is everything, and with La Nina expected to pelt the eastern wheatbelt with heavy rain during the final stages of plant development this spring, about six or seven million tons are likely to be damaged and downgraded to animal feed, Mr Ole Houe, chief executive of IKON Commodities, said. That would amount to about 30 per cent of the crop in the east, he added.

“New South Wales will have large problems,” Mr Houe said, particularly in central and northern parts of the state.

To be sure, two earlier back-to-back bumper harvests in Australia have led to overflowing grain stockpiles, and with a third huge crop on the way and exporters running at full tilt, the country will still ship 28 to 30 million tons this season, Mr Houe said, estimating overall output at almost 40 million tons.

Even so, the world is watching intently how the wild, wet weather across the east coast will impact production, with many of the affected regions there known for growing varieties with higher protein content compared to areas in the country’s west. Eastern Australian milling wheat futures have climbed almost 30 per cent in the past two months amid the rains.

This higher-quality wheat is urgently needed to ease fears about a deepening global food crisis, driven by the war in Ukraine and months of poor weather in the northern hemisphere that cut output everywhere from the US to India. 

Rains and cooler temperatures have interrupted the last stages of plant maturation in New South Wales, causing farmers to push back the harvest by three or four weeks. A longer time in the ground exposes plants to more rain which, if heavy enough, can lead to more downgrades, or wipe out the crop.

Quality in the state has been “significantly impacted”, said Rabobank agricultural analyst Dennis Voznesenski, adding that he expects larger downgrades this season than last year, when rains damaged millions of tons.

Another consequence of a late crop means a shorter, more intense harvest compared to a normal season when farmers and seasonal contractors usually have more time to collect grain as it matures naturally. This could amplify demand for workers at time when labour shortages are a challenge.

These pressures add to existing logistical hurdles. Rain has flooded critical roads for transporting grain from the fields, where farmers in New South Wales are struggling with waterlogged equipment and machinery – exacerbating delays even before the harvest gets into full swing.

Deluges in Victoria at the weekend hit crops in northern and central parts already that were drenched. On a tour of the area last week, Commonwealth Bank of Australia strategist Tobin Gorey saw “water lying around everywhere atop saturated or near‑saturated soils”.

The sodden conditions in eastern states are in sharp contrast to Western Australia, where almost perfect seasonal weather has bolstered expectations for a near-record crop this season.

The key exporting state is getting grain to market at a greater speed than usual for this time of year, thanks to the huge volumes of carryover inventories from the previous two seasons. Shipping activity tends to wind down through September, October and November – not so this year. 

With shipments pumping right through until next year, that could cushion the impact of any potential delays from a late crop on the east coast, Mr Houe said. “We’re actually running October almost like a full month,” he said. “We are gonna move the biggest amount of grain we’ve ever, ever moved before.” BLOOMBERG

Join ST's Telegram channel and get the latest breaking news delivered to you.