CANBERRA, AUSTRALIA — Thanks to an end to a multi-year drought, Australia is projected to increase wheat production by 78% to 27 million tonnes in 2020-21, according to a July 20 Global Agricultural Information Network report from the US Department of Agriculture (USDA).

“After two years of drought, beneficial and widespread rainfall in early 2020 in the eastern states of Australia has created a strong start to the winter crop season,” the USDA said. “Although conditions in Western Australia are drier than average, with greatly increased area and yields in the eastern states Australia is forecast to produce the biggest total wheat crop since 2016-17.”

The increase in production is driven by a forecast 29% increase in acreage, along with a 37% improvement in average yields, the USDA said.

Meanwhile, domestic consumption of wheat is forecast to decrease to 7.05 million tonnes, a 16% reduction from 2019-20, the USDA said.

“This is largely due to a forecast decrease in feed industry demand,” the agency said. “After two years of drought impacting much of the beef cattle industry, improved rains have resulted in restocker demand for cattle to rebuild the size of the herd. This has resulted in a significant decline in feedlot cattle and therefore reduced grain demand for feedlot rations.”

Domestic consumption for flour milling is projected to remain unchanged at 3.55 million tonnes. The USDA noted that the impact of COVID-19 has caused a “short-term ramp up in flour milling as mills boosted production to provide flour for consumers stocking up on supplies. Conversely, there has been a negative impact the foodservice sector caused by restrictions implemented by federal and state governments.”

The USDA forecasts wheat exports to increase by 90% from the previous year to 17.5 million tonnes.

Barley production is forecast to rise in 2020-21, up 9% to 9.8 million tonnes.

In May, after an 18-month anti-dumping investigation, the Chinese government announced it was imposing a five-year, 80.5% tariff on Australian barley.

“This announcement caused barley prices to drop, but because it was at the tail end of the planting season it is not estimated to have had a major change in plantings,” the USDA said. “However, there are likely some growers that opted to swap out late planted barley for wheat in instances where they had suitable late variety wheat seed available.”