Wimmera-mallee to lead production
The Wimmera-mallee is set to fly the flag for 2017-18 Australian crop production with predictions of a 30 percent national drop on last year’s records.
Rural Bank’s Australian Crop Annual Review 2017 has revealed that Victoria is the only state where above-average crop production is expected.
It listed the best results likely to come from the Wimmera and Mallee.
The review shows that nationally, production will be 10 percent below a five-year average, based on poor earlyseason weather conditions across most cropping regions combined with a drier than normal winter.
Circumstances have limited overall yields significantly with below-average production expected in Western Australia, Queensland, New South Wales and South Australia.
The new report, launched by specialist insights team Ag Answers, provides producers and industry with analysis of 2017-18 national and world crop-production estimates, seasonal conditions, prices, demand and the financial performance of Australia’s cropping farms.
Rural Bank agribusiness general manager Andrew Smith said despite a drier than normal winter and below-average production levels expected in many regions, July and August rain had salvaged some potential for the 2017-18 season.
“Rain in the second half of the year has opened the door to the prospect of farmers achieving average yields in some areas such as southern Western Australia,” he said.
“Favourable weather conditions over the next two months will be essential if production levels close to average are to be delivered.”
Mr Smith said at a state level, Victoria was the only state where above-average crop production was expected, with the Wimmera and Mallee regions set to be the nation’s top performers this season.
The report forecasts that national wheat, barley and canola production would be significantly lower than last season, with decreases of 35 percent, 37 percent and 16 percent respectively.
It also details that despite lower crop production in Australia, high-ending stocks overseas meant the likelihood of a large rise in prices in the short to medium term was unlikely.
On the export front, with crop production levels down by almost a third compared with 2016-17, and prices for major crops also down, the value of exports is expected to be lower in 2017-18.
The report predicts the significant year-on-year decline of crop production would also affect farm cash incomes – the difference between total cash receipts and total cash costs – with average farm cash incomes expected to decline across Australia from the 3.5 percent average rate of return recorded in 2016-17.
However, in a mark of the overall financial health of Australian cropping farms, Farm management Deposit, FMD, balances for Australian cropping farms increased in 2016-17, exceeding $2.6-billion.
“It’s encouraging to see our crop farmers planning for the future and investing in the FMD scheme,” Mr Smith said.
“As we’re all well aware, farming is a cyclical business and preparing for a rainy day – or in this case the nonrainy day – is crucial.
“Weak grain prices and below-average yields might cause cash-flow challenges for some Australian farmers, but they are generally well-positioned to navigate this period thanks to planning and risk-management strategies they use from season to season.”
People can view the Australian Crop Annual Review 2017 online at www. ruralbank.com/crop.