Orietta Guerrera
HOUSEHOLDS can expect higher food bills as most of the country's grain-growing areas remain in the grip of drought, slashing forecasts for the national winter grains crop by 11 million tonnes.
After a dry winter and start to spring, the Australian Bureau of Agricultural and Resource Economics has predicted a winter grain crop of 25.6 million tonnes, down from 37 million tonnes forecast in June.
Families can expect to pay more for meat, dairy products and eggs as the shortage will push up the price of grains for producers. It will devastate livestock farmers, who already face bidding wars to buy feed for their animals.
The forecast is above last winter's crop, when 15.7 million tonnes was harvested because of the worst drought in memory, but it is 27 per cent below the five-year average.
ABARE chief commodity analyst Terry Sheales said grains production typically rebounded strongly after a severe drought year, but this year might be an exception.
"Everything got off to a great start this year, no one would argue with that," Dr Sheales said. "But unfortunately it's suddenly stopped raining and it's been like this for a couple of months now."
Most cropping regions of Australia recorded below-average winter rainfall, dashing the hopes of many growers who were in line to pocket record global wheat prices because of an international grain shortage. Last month was particularly dry, with warmer than usual conditions and strong winds also threatening crops.
It is vital that rain falls this month as crops enter their final growth stages. In its latest three-month rainfall outlook, released last month, the Bureau of Meteorology reported mixed chances for spring rain.
Wheat production is forecast to be about 15.5 million tonnes, 7 million tonnes below earlier estimates but above last year's 9.8 million tonnes.
However, the Australian Greens said the forecasts were too optimistic and a ploy by the Federal Government to underplay the impact of climate change on agriculture.
NSW has been the worst hit. Its wheat forecast has been halved to 4 million tonnes.
In Victoria, after one of the best starts to the season in years, conditions have deteriorated since last month. Total winter crop production is expected to be about 5.2 million tonnes, including 2.7 million tonnes of wheat.
Victorian Farmers Federation livestock president Ailsa Fox said the cost of wheat and other grains, already at $400 a tonne, was beyond many livestock farmers' means.
She said consumers would inevitably face price increases due to a shortage of quality meat.
"Last year a lot of us fed stock through in good faith to make sure that we had a continuous supply for the marketplace," Ms Fox said.
"It cost us money and most of us are not prepared to do that again this year."
Australian Egg Corporation spokesman Anthony Fisk said that with grain the biggest variable cost for egg producers, the wheat price spike was having an immediate impact on production costs.
"That will have to be passed on eventually to the consumer," he said.
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