NSW Department of Primary Industries

Cropping

Cropping Gross Value of Production 2021-22 64

  • Output 2021-22
  • Y.o.y. % change
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NSW Production Weighted Crop Price Index 201 90 ad

  • Cereals
  • Oilseeds
  • Pulses
  • Cotton
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The 2021-22 cropping year built upon the strong foundations of the year prior, underpinning a second consecutive record sector GVP estimated at $11.9 billion, and 43% higher year-on-year. 64 Robust winter crop production was steady at near record levels, combined with a large summer crop and high commodity prices to produce this outstanding result. The overall area planted to either winter or summer crop also peaked, while seasonal conditions, aided by weak to moderate La-Nina conditions, were generally conducive to very high yields. These conditions resulted in some crop losses where water inundation occurred particularly during the November harvest period, as well as quality and crop downgrades in a large portion of the winter crop.

Crop commodity prices performed strongly due to a range of factors including a severe drought that gripped much of western USA and Canada, dry conditions in Europe, declining global stocks and not least, Russia’s invasion of Ukraine in early 2022 which impacted global grain supply. As a result, crop prices were up year on year with canola and cotton receiving the largest relative pricing support, while wheat prices were also up sharply but still below drought pricing levels seen in 2018 and 2019. While grain pricing was up due to global supply and demand imbalances, the weather-related quality issues subdued pricing with grain quality downgrades common place. Also of note was Australian wheat, canola and cotton prices that generally began trading at negative basis levels compared to global benchmarks. This was attributed to local pricing influences in competitor Northern Hemisphere markets lending more support relative to Australia, as well as market displacement for commodities such as Australian cotton, which is being informally boycotted by Chinese cotton buyers.

Winter Crops

The prevailing seasonal conditions, which were dominated by a weak to moderate La Nina, supported a second year of excellent growing conditions. A relatively mild summer with temperatures one to two degrees below average maximums, combined with average to above average summer rainfall across the majority the cropping zones of NSW, meant that root zone soil moisture levels were reasonable leading into planting. 1 112 A timely seasonal break in February-March 2021 with widespread above average rainfall followed by drier April and May aided sowing operations. As a result, there was a significant planting of an estimated 6.14 million hectares which was the second largest winter crop planting since 2010-11, and 7.8% higher than the 20 year average. 1 201

As the winter cropping season progressed, most of the cropping districts received good rainfall through to October, except for a dry spell in Southern parts of the state in August. 1 Given the mix of seasonal conditions and timely planting, crop yield potentials were maximised leading into harvest. Unfortunately, the prevailing La Nina expressed itself in November 2021 with the majority of the state experiencing severe storm fronts, bringing 100mm to 300mm of rainfall at grain ripening to most cropping districts. 1

Prior to these fronts, harvest had begun in the Northern part of the state with reports that grain quality was very good, although the rainfall combined with harvest delays and further summer storms which deteriorated crop quality significantly. As a result, NSW grain quality was much lower with approximately 68% of the crop making Australian Standard White (APW) grade or below. 212 114 The proportion of lower grades in NSW was higher than Queensland where harvest was further advanced prior to the storms, and Victoria which received lower rainfall totals. 1

Despite the untimely harvest rainfall, crop losses were limited to low lying country and land adjacent to waterways, however the bulk of the crop was estimated to be harvested with yields similar to those of the record-breaking season the year prior. Overall production was also just shy of the record NSW crop the year prior, and as such produced the second largest crop on record at 18.8 million tonnes. Western Australia with production of 23 million tonnes, was the only state with a larger crop.

Indicative NSW Wheat Quality 212 114 w

  • 2020-21
  • 2021-22
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Summer Crops

The average to above average rainfall which benefitted winter crops, also benefitted summer cropping operations, with root zone soil moisture generally very good at planting. 112 Water allocations at sowing were higher than a year prior at over 100% in the Southern Basin, x however allocations, particularly in the Northern Basin, y continued to climb from November onwards due to the November storms. 31 Some of the allocation increases came too late to influence planting decisions in the Northern Basin. y

Regulated River Water Allocations 201 31 ab

  • General Security
  • High Security
  • Carryover
  • Total Cotton & Rice Production (RHS)
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Allocations were upgraded almost monthly as dam storage levels increased rapidly with soaked catchments in the Eastern ranges resulting in high runoff levels with the above average summer rainfall. 1 112 By November, Northern Basin y General Security (GS) allocations were roughly 78% of total allocations available, equating to approximately 1,274 Gigalitres (GL), while the Southern Basin x GS allocations were estimated at 106% or approximately 4,500 GL of water available. 31 aa

Although seasonal conditions in 2020-21 were conducive to summer crop plantings, plantings were up significantly again in 2021-22 as improved soil moisture, increased on farm storage levels, higher water GS water allocations and improved commodity prices all helped to stimulate the bigger crop. Total summer crop plantings were similar to the prior 2011-12 peak, at an estimated 1.09 million hectares, which is equal highest plantings since the implementation of the Water Act 2007 (Cwth). The growing season was also relatively mild, with extreme heat and high overnight temperatures limited relative to prior years, aiding very high yields for many summer crops. While the cool and wet season did pose production challenges, overall production was close to record levels due to the very high yields. 201

Increased cotton production is expected to be one of the largest drivers behind GVP growth in 2021-22, with production up across all valleys, with the largest increases expected in Southern NSW and the Gwydir valley. 32 Sorghum production was also up sharply as ideal planting conditions, water availability and strong prices combined for the largest crop in 14 years. Rice production also increased sharply to an estimated 688 thousand tonnes, but still remains below the recent peak of 1.1 million tonnes set in 2012-13 as competition for water has increased alternative crop production in the Southern valleys. 201

Outlook

Conditions leading into the 2022 winter cropping season saw well above average rainfall in many parts of the state. 1 This meant that crop sowing had to be delayed in many districts, and in particular the central west, as producers awaited paddocks to dry out. As a result of the challenging sowing conditions, winter crop sowing is estimated down 3.5% year on year. Production is also expected to be down approximately 19% year on year, as two consecutive prior large crops are likely to reduce available nutrients and high fertiliser prices and challenging seasonal conditions are expected to limit yield potential. 201 Grain and canola prices have retreated from previous highs at the beginning of the season as surprising canola production forecasts out of Europe and Canada shocked the market, as well as increased movements of grain from Ukraine ports which alleviated export supply bottlenecks - which have since been halted. 140 141 The result being that many Australian producers have faced a risk reward trade off with a significant winter crop planted despite large increases in production costs that are often borne well in advance of harvest.

The summer crop planting is also currently forecast to remain steady at slightly over 1 million hectares as water storage levels remain close to 100% capacity, however the planted acres hang in the balance with optimal sowing windows closing rapidly with recent heavy rainfall. 201 62 Water allocations as at August, point towards almost a doubling of GS water available through account carryover in the Northern Basin. y

The Southern Basin x allocations are down roughly 24%, partly offset by increased carryover. 31 The Murrumbidgee GS allocations are well below 2021 levels, noting however that allocations increased sharply from November 2021 onwards in the previous water year. 31 Cotton prices have dropped sharply to sub $650/bale levels, as recent global forecasts for demand have been revised downwards sharply related to global economic concerns, which resulted an upward revision of global ending stocks. 256

The Russian invasion of Ukraine has had an acute impact on cropping industries with increased energy prices leading to higher fertiliser prices, while supply chain and production issues in Ukraine are exacerbating existing supply shortfalls and global trade flow distortions created by Western led sanctions on Russian products, including wheat. A combination of drought, mixed demand. some surprising Northern hemisphere production results and supply chain issues means that the global balance sheet for key Australian commodities wheat, canola, barley and cotton, remains extremely mixed, and as a result each commodity market has been impacted in slightly differing ways. 256

Stronger Primary Industries Strategy

Combining biomass and concentrated solar power for electricity generation

NSW DPI Forest Science has partnered with the University of Technology Sydney (UTS) to understand the potential for energy generation from hybrid concentrated solar and biomass plants (HCSB). HCSB plants integrate a concentrated solar power (CSP) unit and a bioenergy unit for combined energy generation, which makes the technology highly dispatchable.

Strategic Outcome

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Carbon Neutrality and Climate Resilience
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The work has combined in-depth analysis of biomass availability, direct normal irradiance (DNI) profile and a range of parameters required to support techno-economic assessments. We have also engaged with communities to discuss the opportunities and barriers for HCSB plants in their region.

The first stage of the work involved the identification of suitable regions for the establishment of HCSB plants. NSW has one of the best solar resources in the world, exceeding 1,800 kWh/m2/year. Biomass resources, such as forestry and agricultural residues, can be found in many areas of the state. The availability of biomass is well documented – for example, in the Australian Biomass for Bioenergy Assessment project (https://www.dpi.nsw.gov.au/forestry/science/forest-carbon/abba). Use of residues provides a number of potential co-benefits – reduction of wastage, increasing value-adding and also supporting the generation of locally derived energy. Feedstock may also be derived from dedicated biomass crops (https://www.dpi.nsw.gov.au/forestry/science/forest-carbon/biomass-for-bioenergy/biomass-crops).

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In CSP systems, unlike photovoltaic systems, solar energy is concentrated into a central receiver through the use of mirrors and collected with a thermal energy carrier (e.g. molten salts). Use of biomass in HCSB reduces or eliminates the need for storage systems. Combustion of biomass is a mature technology deployed in many power plants operating globally. In addition to electricity, heat is also generated in HCSB systems, which can be used for a number of industrial applications that requires heat or cooling in their operations. Importantly, such systems may provide an option for regions in NSW to become self-sufficient in energy generation, without relying on fossil fuels.

We have shown that HCSB plants can supply up to 830 MWe of dispatchable, renewable electricity in NSW, when located at zone substations with new connection capacity. Additional targets for HCSB plant integration may include industries with low-to-medium heat demand (< 250°C), such as meat processors.

One area of NSW which has significant potential is the Griffith region, which has a high direct normal irradiance (DNI) and abundant biomass. Using that region in a case study, we demonstrated that HCSB plants can produce electricity at substantially lower cost than CSP plants (10 – 39 % lower costs). The initial investment is also lower, with a reduction of capital costs of 24 – 45 %. HCSB plants require less space for siting, with a solar field size reduction of up to 75 %. Though the cost of electricity generation is high compared to intermittent sources (e.g. wind and solar PV), this technology is highly competitive against comparable dispatchable energy sources.

This is just one example of the type of work currently underway looking at ways in which forestry can contribute to the achievement of improved climate and environmental outcomes in NSW as part of Outcome 5: Carbon Neutrality and Climate Resilience.

www.dpi.nsw.gov.au