SYDNEY, AUSTRALIA — Australia is expected to produce another large grain crop in 2022-23, following a record-setting winter crop and strong summer crop production in 2021-22, according to a report from the US Department of Agriculture’s Foreign Agricultural Service (FAS).

While overall grain area is anticipated to remain large, yields are expected to fall towards more typical levels from last year’s exceptionally high yields. Wheat and barley exports are set to decline from a historically high volume estimated for this year.

Wheat production is expected to decline to 29 million tonnes, down from 36.3 million tonnes in 2021-22 and 33.3 million tonnes in 2020-21. A small reduction in planted area is expected due to rising costs for three major inputs-fertilizer, chemicals and diesel-and some supply challenges, FAS said.

Area for wheat is forecast to decline by 4% to 12.5 million hectares from the previous season of 13 million hectares. However, the forecast area is still 650,000 hectares above the previous 10-year average.

Wheat exports for 2022-23 are estimated at 22 million tonnes, a 5.5-million-tonne decline from the record 2021-2 estimate. This would still be the fifth largest wheat export program on record. This expected drop in exports is primarily driven by the forecast 7.3-million-tonne decline in production, FAS said.

The Russian invasion of Ukraine has created even more demand for Australian grain. However, Australian monthly grain export volumes had begun to reach port and export supply chain capacity limits even before the invasion occurred, which is constraining the ability of Australia to significantly expand monthly shipments.

It will take a few months before backlog export sales are completed before any shipments can be expanded to meet new demand, FAS said.

“Although typically Australian export and port capacity is more than sufficient to meet export requirements, the combination of strong global demand and record production this year for all three of these crops (wheat, barley, canola) is resulting this year in sales bumping up against logistical export capacity,” FAS said.

It is expected that Australian shipments of grain (especially wheat) will continue at peak levels longer than is usual for an export season. Typically, exports start to fall in June through to November, but this year they are likely to remain high throughout the marketing year (see Figure 12).

Sorghum production is forecast at 1.6 million tonnes, a decline of 1 million tonnes, but in line with the 10-year average. Sorghum exports are also forecast to decline in 2022-23, but this is after an estimated record export program in 2021-22.

Rice production in 2022-23 is forecast to continue to expand for the third successive year following a huge rise in production in 2021-22. Production is estimated at 540,000 tonnes.