The playbook is familiar to Western Canadian farmers, especially in the northern and eastern growing areas. Rice tires, tracks and the 4WD tractor parked with a long tow strap parked on the edge of the field. The picture below shows that the eastern Australian canola harvesting experience is very similar to those wet harvest years in Western Canada. At least it is spring in Australia and the warmer weather makes the muck seem at least a bit more tolerable than dragging the strap through the cold mud. The problems for Australia are very serious for wheat, barley, canola and pulse crop quality and quantity this year.
The rains last week were spread across eastern Australia with amounts ranging between 15 and 100 mm. There was even some rainfall in southern Western Australia, but these rains likely only delayed the harvest for a couple of days in the Esperance region. The concern is still with the crops in South Australia, Victoria, New South Wales and Queensland. The wet conditions have caused harvest delays but also has caused significant downgrading of crop quality for wheat, barely and even canola. Canola sprouting will be an issue in Australian canola this year as the wet conditions combined with warming temperatures result in ideal conditions for in pod sprouting.
The wheat crop is most impacted by the rains this harvest season. Australia grows mostly soft white wheat, which has similar sprouting resistance to Western Canadian durum. This means that most of the crop in eastern Australia will have issues with falling numbers. Australian Prime Hard (APH) wheat production will be severely impacted by the wet conditions. Most of the APH production is grown in northern New South Wales and southern Queensland. Production of APH is usually 3.5 to 5.0 million tonnes. This is a premium high protein wheat that is used in Asian markets, especially Japan. MarketsFarm estimates that the APH production this year will be less than 2.0 million tonnes, which means that buyers will have to seek alternate suppliers. The primary alternatives are U.S. DNS and Canadian CWRS for the lost Australian production.
Overall production estimates for Australia have been reduced by MarketsFarm to 32 million tonnes from the previous estimate of 34 million tonnes. The wet conditions are expected to cause increased harvest losses in eastern Australia. There are estimates that up to 50 per cent of the wheat crop in eastern Australia will grade feed, but we find that estimate to be a bit pessimistic. The eastern crop is expected to be 18 million tonnes and it is likely to experience downgrading on about 5.5 to 6.0 million tonnes (33 per cent). This is significant as only a portion of the feed wheat will be exported. Most of the feedlots in Australia are in eastern Australia, so some of the feed wheat production will be soaked up by the livestock operations. At the end of the day, these quality issues will result in increased demand for Canadian wheat. Most of the Canadian crop is high quality and is price competitive. This will result in some additional APH replacement business for CRWS this marketing year. The strong Canadian exports of wheat are likely to get even stronger in the coming months.