Analysts' forecasts for Australia's wheat harvest exceed official estimates

Ahead of the Australian Bureau of Agriculture and Natural Resources Economics and Science's (ABARES) quarterly report, brokerage IKON Commodities has released its own crop forecast, which beats ABARES' July estimates.

According to IKON's forecast, the harvest of the three main winter crops in Australia will amount to 48.1 million tons, which will be inferior to last year's record 65 million tons, but will exceed the 5-year average by 3%. Thus, wheat production will amount to 30.4 million tons, barley - 12 million tons, rapeseed - 5.7 million tons, while ABARES in June estimated them at 26.2 million tons, 11.5 million tons and 4.9 million tons in accordance. Production projections differ greatly between the arid northern regions and the more rainy southern regions. The coming weeks will be decisive for the future grain crop, which is now in dire need of rain.

According to ABARES, the average price of an Australian agricultural hectare has doubled over the past three years, and the value of fertile land in regions with high rainfall has increased by 125% to $9,000. In the wheat belt, prices rose by 80% to $3,465/ha.

Australian farmers are adapting production to the negative effects of climate change, and now $1 invested in research and development generates about $8 in gross value added in agriculture.

The near-zero use of agricultural subsidies avoids market distortions that lead to bad environmental consequences for agriculture. Compared to other large agricultural producers, Australian farmers have a better balance of nutrients in the soil, use less fertilizer and more sustainable farming practices.