Cropping Overview
Cropping
Crop production was impacted by continued drought conditions across the state in 2019-20, with total crop production falling 16% year on year to 3.76 million tonnes of output. Compared to the moving five-year average, production was down 63% 10. The tough season was defined by below average rainfall across much of the state leading to limited soil moisture in the cropping regions as well as severely reduced water allocations for irrigated crop production. Regional variations also contributed to the result with southern dryland production systems benefitting from some modest improvements on the year prior compared to irrigated and northern dryland production systems. The combination of these factors resulted in total cropping output for 2019-20 estimated at $2,037 million a decline of 28% year-on-year.
Weed control in winter crops
Farmers can get the latest information on effective weed control, which is vital for successful and profitable crop production in the DPI 2020 Weed control in winter crops management guide.
This guide provides important information on the new products and registrations for 2020, the recommended timing for applying herbicide and application rates covering winter cereals, pulses and oilseeds.
Smart business decisions in summer crops
The NSW DPI Summer crop management guide includes the latest comprehensive information relevant to the major summer crop types grown in NSW.
The guide includes variety selection, together with agronomic recommendations, in a format that is easy for producers to use.
This guide has assisted growers and advisers to make smart business decisions in summer crops to optimise production and profitability through ongoing drought conditions in 2019-20.
Winter Crops
Winter began with a generally poor autumn 2019 break and was the third consecutive winter with below average rainfall, which led to winter crop plantings declining by 23% year-on-year to 3.1 million hectares 10. The southern cropping region benefitted from a benign start to the season, albeit following consecutive drier than average years, which allowed some reasonable winter crop plantings. Above average temperatures progressively worsened as the season progressed, as did rainfall anomalies, with the northern cropping belt experiencing the brunt of the impacts in reduced plantings and poor yields. Winter cropping proved quite resilient, increasing by a modest 3% year on year and 3.34 million tonnes produced predominantly from southern cropping regions 10. Yields improved on the year prior for all major commodities with the exception of barley, which is largely attributed to producers opting for limited risk strategy by sowing fallowed fields or where some residual moisture was present 10.
Wheat accounted for 56% of total crop production for the year at 2.09 million tonnes, and an increase of 12% year on year boosted by an increase in yields. Barley, canola and oats contributed a further 1.09 million tonnes or 29% of total production while there were some moderate increases in pulse crop production from southern region dominant field peas, faba beans and lupins also 10. Prices for most winter crops eased for the year however, still remained above the moving 10-year average levels underpinned by solid domestic demand. Wheat prices eased 6% year on year on average to $332 per tonne, while barley prices fell by a more substantial 21% to $270 per tonne with new Chinese barley duties being imposed in our largest export market 9. As a result of the continued dry conditions, the combined output of the winter cropping commodities was $1,263 million, down a modest 7%.
Summer Crops
The lack of general soaking rainfall failed to replenish water storages for the summer cropping season as general security allocations were limited across all major river systems. The total summer cropping area declined sharply by 80% to just 128 thousand hectares, while total summer crop output also fell by 65% in volume terms 10. The lack of winter rainfall meant there was little stored soil moisture to risk planting predominantly dryland summer crops such as sorghum and sunflowers. Conversely low water allocations and limited carryover water entitlements resulted in limited irrigated plantings of cotton which was down 70% to 418 thousand bales and rice was down a further 26% on already historically low production the year prior to just 45 thousand tonnes for 2019-20 10.
Cotton prices gained some momentum throughout most of the year supported by a lower Australian dollar and tariff free access to China however, COVID-19 saw consumer demand for cotton eroded and farm gate prices declined up to 19% from pre-pandemic levels as a result (DPI, 2020).
Competition with cheap synthetics as a result of the lower crude oil price also kept downward pressure on prices moving forward. Conversely rice prices for the 2019-20 crop rose to their highest level on record, averaging $750 per tonne with contracts as high as $1500 per tonne for organic rice varieties 131. These contracts were offered due to the limited water allocations as a way to incentivise rice production rather than trade water allocations to other irrigated industries. The combined effect of the above factors meant the value of summer crop production was down 63% to an estimated $411 million.
Cropping estimated output 2019-20
- Output 2019-20
- Y.o.y. % change
Source: DPI (2020)
Outlook
Looking to the short to medium term, the outlook is for significantly improved production, with winter crop output forecast to increase 344% to 14.8 million tonnes in total, the largest crop since 2016-17 and 66% above the 5-year moving average 10. An optimal autumn break for the majority of the cropping belt and good in-crop rainfall are the key drivers behind this result. For the irrigated summer crops, the prospect of increased production is likely with improved on farm storage levels, and a near full soil moisture profile will assist with sowing. However, further rainfall will aide general security water allocations to a level where river water becomes a major source of irrigated production in 2020-21, particularly in the northern basin.
This increased production is forecast to impact on prices as domestic demand decreases for livestock feeding purposes and prices re-align with international prices once again. The wheat price is expected to fall approximately 20% to $267 per tonne on average in 2020-21 while the flow on effects from the barley import duties to China will continue to apply pressure to prices for the foreseeable future 9. Demand for cotton is expected to remain subdued with the ongoing economic fallout from COVID-19 while food staples such as rice may benefit from altered planting decisions towards rice and solid international demand for our product. Fixed price contracts between $475 and $625 per tonne are on offer for a limited volume of rice 83,132.
The prospects of a vastly improved season for cropping producers in 2020-21 is looking very promising, and the future of the sector will be well supported by the states primary producers ability quickly capitalise on the opportunity at hand.
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