Officials in Australia announced Tuesday that the nation’s wheat production this year will reach its lowest point in three years, driven by elevated fertilizer expenses and drought conditions affecting certain regions.
As one of the world’s leading wheat exporters, Australia’s diminished crop output will tighten global grain supplies, potentially driving up food costs that already hit two-year peaks last month following crop damage in the United States.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released quarterly projections showing wheat production will total 26.7 million metric tons this harvest season.
This represents a decline of approximately 9 million tons compared to the previous season and falls roughly 8 million tons below the five-year average, based on agency data.
Fertilizer expenses have surged dramatically since the conflict in Iran disrupted shipments from Gulf region suppliers. These elevated costs will likely lead farmers to reduce fertilizer application, limiting crop yield potential, according to ABARES, which operates under the agriculture ministry.
Additionally, eastern regions of Australia have experienced extended periods of insufficient rainfall over recent months. While May brought beneficial precipitation that improved growing conditions, the national weather service continues forecasting El Nino patterns and below-normal rainfall in upcoming months.
“It will be crucial that adequate and timely supply of fertiliser is available and adequate rainfall is received to meet current yield projections,” ABARES said.
The agency projects wheat planting areas will decrease 12% from last season to 10.9 million hectares, marking the smallest planted area since the 2019/20 growing season.
Barley cultivation, which demands less fertilizer than wheat, is expected to expand 4% from the previous season to 5 million hectares, though total production will still decline 15% to 14.1 million tons, ABARES reported.
Canola planting areas, requiring substantial fertilizer but commanding higher market prices than wheat, should contract 6% to 3.5 million hectares, with harvest volumes dropping 20% to 6.2 million tons.
Australia’s planting season is concluding, with harvest operations scheduled to begin near year’s end.
