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Australia Slashes Wheat Forecast Due to Drought

Australia slashed its official 2007/08 wheat crop forecast by 22 percent on Tuesday, the second downgrade in just six weeks as drought and searing temperatures have led to total crop failure in some regions.

AP

Government agency, the Australian Bureau of Agricultural and Resource Economics, cut its forecast for the wheat crop to 12.1 million tons, down from a September forecast of 15.5 million tons.

The forecast crop has almost halved from an earlier June estimate, but it is still above last year's output of just 9.8 million tons, when the crop was also ravaged by drought.

Australia, normally the second-largest wheat exporter in the world, usually produces wheat crops of around 25 million tons.

The bureau also cut its barley forecast by 15 percent to 5 million tons, and the nation's canola crop forecast by 19 percent to 909,000 tons.

"Lack of rainfall, combined with hotter than average daytime temperatures and strong winds has led to the rapid deterioration of crop yield potential and in many areas has resulted in total crop failure," the bureau's executive director Phillip Glyde said.

The biggest fall was for New South Wales state, where the bureau forecast a wheat crop of 1.7 million tons, down from 4.0 million tons forecast in September and the 8.08 million tons it forecast in June.

The new forecast brings the bureau into line with private forecasts, which predicted a wheat crop below 13 million tons despite recent rains.

Glyde said the winter forecast for the three main crops was 18 million ton, about 42 percent below the five-year average, but still about 4.0 million ton higher than 2006/07 production.

He said rainfall during the critical September-October period had been below average throughout much of Australia's grains belt, with the exception of Queensland, pockets of northern New South Wales and southern Western Australia.

"New South Wales has been particularly dry, with many regions recording their lowest September-October rainfall on record," he said.