WASHINGTON, D.C., U.S. — Despite unfavorable weather conditions in parts of Australia, overall 2017-18 wheat production is expected to reach the official forecast of 21.5 million tonnes.

Late season rainfall and milder temperatures helped winter crop production and yields in South Australia, Victoria and Western Australia to be higher than expected, according to a report from the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS).

Yields are expected to vary significantly across regions.

Domestic consumption is estimated at 6.8 million tonnes. Consumption has declined in recent years due to changes in diets.

Wheat exports are forecast at 16 million tonnes but stock levels are revised down to reflect the government’s amended 2016-17 production data, the FAS said.

“Australian exporters are expected to face continued competition in major markets from Black Sea wheat exporters, especially feed wheat,” the FAS said. “Australian premium hard wheat exporters also compete in Southeast Asia against traders from the United States and Canada.”

Barley production for 2017-18 is expected to be 8.5 million tonnes, lower than the official forecast of 8 million tonnes, the FAS said.

Domestic consumption is estimated at 2.8 million tonnes. Exports are estimated at 6 million tonnes, slightly above the official estimates, due to higher than expected production and yields.

China is the top destination followed by Saudi Arabia and Japan, the FAS said.

Sorghum production is expected to rebound to 2 million tonnes, 5% above the official forecast as favorable weather conditions are expected compared to the previous year. In addition, the crop area is expected to expand by 5% to 700,000 hectares.

The biofuels industry is driving domestic demand for sorghum, the FAS said, noting the Dalby ethanol plant in Queensland is currently expanding operations to meet a new state government ethanol mandate.

When the Dalby operation is running at full capacity, around 200,000 tonnes of sorghum is expected to be used for ethanol production annually.

The biofuel plant also produces dried distillers' grains (DDG), which is sold mainly as a high-protein feed stock for swine, dairy cows, and grain fed beef cattle, the FAS said.