THE LIKELY end of the three consecutive years of La Nina weather patterns is a key reason the Australian Bureau of Agricultural and Resource Economics and Sciences is cutting Australian wheat production estimates for the 2023-24 season.
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The national forecaster is predicting a hefty fall of 28 per cent to 28.2 million tonnes of wheat produced for the 2023-24 season based on a return to drier conditions.
While the big drop in production seems alarming at face value it comes off a record crop in 2022-23 of 39.2m tonnes and the 28.2m tonne figure offered by ABARES remains above historical averages.
This year, the 2022-23 crop is set to also achieve a record value of $15 billion, which will comfortably surpass the previous record, set in 2021-22 of $13.1 billion, with ABARES analyst Emily Dahl attributing the combination of high prices and high production for the record.
For the upcoming season Ms Dahl forecasts a drop in crop value to $10.7 billion.
"Despite being a significant fall in value, it is still well above average and would be the third highest value on record," she said.
On the pricing front, Ms Dahl is expecting global prices to remain high for the short-term, although she said there could be some easing with a better world crop and an improved supply chain.
However, she said this was not a certainty and that world grain markets could remain volatile for longer if the pace of world economic growth is slowed, global inflation remains high and agri-food markets remain disrupted.
Australia has had a big year on the export front, with wheat exports set to increase to $14.2 billion in 2022-23, the highest export value on record, at 25pc above the previous record of $11.3 billion in 2021-22.
Again, Ms Dahl said this figure was expected to ease next season to a figure of $10.8 billion, which would still be the third highest export value on record if it was achieved.
Further out Ms Dahl expects export figures to hover between $7 and $9 billion, with $7 billion more likely in drier seasons.
On the international front, Ms Dahl identified the situation in Ukraine and the ability of Ukraine and Russia to export wheat, along with the ongoing drought in the US winter wheat belt as key issues for world markets to consider in the short term.