Rain to deliver fourth biggest winter crop

Consistent rain, especially in arid Western Australia, has buoyed hopes of a bumper winter crop for 2011/12, the federal government's commodity forecaster says.

At an estimated 41 million tonnes, the predicted winter crop will be down slightly on last season, but nonetheless still Australia's fourth-largest winter crop on record.

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released its latest forecast, announcing that most cropping regions in Australia had enjoyed good rainfall in August and early September.

Even Western Australia received between 25 and 100 millimetres - a "stark turnaround from last season's dry conditions," ABARES acting deputy executive director Terry Sheales said in a statement.

WA, along with South Australia, Victoria and southern NSW are expected to lead the charge, with northwest NSW and southwest Queensland still needing rain if they're to achieve average yields.

Wheat production is forecast at 26.2 million tonnes in 2011/12, slightly lower than last year's crop.

Barley is predicted to fall by 11 per cent to 8.3 million tonnes while canola production is due to jump by seven per cent to 2.3 million tonnes.

ABARES also noted that a mice plague in the eastern states is likely to take a bite out of profits, with farmers having undertaken much more baiting than normal.

Dr Sheales said farmers will be hoping for more rain to come over spring to assist the planting of summer crops.

Overall, summer production is forecast to increase by two per cent to 4.8 million tonnes off last season.

Although grain sorghum crops is expected to fall, the availability of water should lead to a rise in rice plantings of about 10 per cent, increasing production to about 909,000 tonnes for 2011/12.

Cotton plantings are also expected to expand to around 600,000 hectares, potentially leading to a record crop of 1.1 million tonnes.

The next crop report is due to come out in December.
Commsec chief economist Craig James said the figures suggested Australia's rural economy was generally healthy.

The latest forecast of 41 million tonnes is up from the June figure of 40.8 million tonnes.

"There will always be differences in seasonal conditions across Australia, but in a broad sense the rural sector is in good shape," Mr James said in a statement.

"The hope is that rains continue to fall at the right times and in the right places in coming months, thus serving to buoy confidence and spending.

Meanwhile, ANZ says this year’s Western Australian wheat harvest will double last year’s output, thanks to steady winter rainfall creating exceptional growing conditions.

ANZ head of regional commercial banking in Western Australia, Kym Darcy, said it was an exciting time for the state’s agricultural sector.

Mr Darcy said the bank was forecasting a bumper harvest of 9.5 million tonnes this year, the second highest in a decade and close to double that of 2010.

“There is plenty for local farmers to be optimistic about,” Mr Darcy said.

“Grain prices are strong, particularly as the world experiences shortages for proteins and therefore global demand for Australian grain grows.”