A divergent set of wheat crop harvest for fiscal 2016-2017 makes it hard for Australia’s grain industry to have a more or less accurate gauge of the market, which then prevents them from setting fair prices.
The complication stems from different figures for crop harvest by the Australian Bureau of Statistics (ABS) and ABARES. The latter’s initial figures for the period comprised 30.35 million tonnes of grain, while the former announced 35 million tonnes of harvest.
ABS’ Kirrilie Horswill said that the agency’s data would often be different not just with ABARES, but also compared to figures from other private forecasters. According to Horswill, the ABS has based its numbers from surveying farm businesses. A problem, however, involves some farmers who refuse to disclose information on grain stocks.
These businesses believe that doing so will put them at a disadvantage with grain buyers, who will likely use the information against them. Some farmers suggested that an alternative for a more accurate disclosure would require stocks information from leading bulk handlers.
Despite this scenario, the outlook for Australian grain stocks remains positive in the near future.
A farm equipment supplier may still notice a steady source of business in Australia for 2018-2019, despite a 1 per cent decline in global wheat harvest area during the period. The International Grain Council (IGC) expected this drop due to farmers’ reaction to low prices.
The contraction would represent the first decline in six years. Wheat production worldwide reached 757 million tonnes in 2017-2018. IGC said that it would fall to 742 million tonnes, after continually increasing in the last five seasons.
It remains to be seen whether or not preliminary estimates for wheat harvest in Australia and abroad would suffer a decline. What is your outlook on the grain industry?