Sorghum production is expected to bounce back following rainfall across much of Queensland and northern New South Wales. The boost to the outlook for the 2015 crop would see production return to average levels.
According to the National Australia Bank (NAB) Agribusiness Commodity in Focus report for February, which provides a wrap up on price and production forecasts for summer crops, sorghum is the standout crop with production forecast to increase 63.6 per cent in 2015.
Khan Horne, General Manager of NAB Agribusiness, said this year’s crop has shown a real turn around following late rain.
“It’s good to see improved conditions and sorghum production back up to more average levels in northern New South Wales and the Darling Downs. “We expect yields to be in the order of the ten year average to slightly below, but good rain following Cyclone Marcia across the Darling Downs points to the upper end of the range at this stage,” he said.
“Sorghum prices fell in mid-2014 in line with lower international grain prices, but have since trended upwards somewhat. We forecast sorghum prices to be on par with last year, with just a 1.2 per cent fall in Australian dollar terms, even with the surge in production.
“The falling Australian dollar will also cushion some of the impact of falling global prices for grain sorghum,” he said.
Across the other summer crops, reduced irrigation water allocations have seen a fall in area planted to cotton and rice, while feed maize is up slightly.
Cotton production is forecast to be down 46.4 per cent this year and we are also likely to see some year-on-year price falls as changes to China’s subsidy arrangements and cheaper synthetic fibres eat into demand.
Similarly, production of rice is expected to fall 17.8 per cent and prices to be down 11 per cent. Lower irrigation water availability stemming from below average inflows into Murray Darling basin storages in New South Wales was the main cause of the smaller area planted to rice this season.
On the upside, the production of feed maize is forecast to increase 9.9 per cent based largely on an increased area planted in New South Wales and Queensland. Prices are expected to be stable with a 1.3 per cent increase.
“Overall the outlook for the season is strong and reflects a steady improvement to the expected conditions at the beginning of the year,” said Mr Horne.