Australia's national commodities forecaster is tipping that the country's winter crop production will fall 21 percent this year. The decline is being driven by dry seasonal conditions and high input costs such as fuel and fertiliser, which together have led to a slightly smaller planting. With average yields also expected to be down, the overall harvest is set to come in well below last year's very large crop.
The pullback is spread across most of the major grains. Wheat production is forecast to fall 26 percent, while barley is expected to be down 15 percent and canola down 20 percent. The sharpest drop is in chickpeas, which are projected to plunge by 51 percent. After a standout season the year before, the figures point to a marked cooling across much of the winter cropping program.
One crop is bucking the trend in dramatic fashion. Lentil production is forecast to rise 3 percent to a record 2.2 million tonnes, as farmers increasingly turn to it. Part of the appeal is practical, because lentils do not require much fertiliser compared with other crops. That advantage has become especially valuable at a time when the cost of inputs is weighing heavily on growers' decisions.
The shift towards lentils has been building for years and is now accelerating. Planted acres have risen by close to 150 percent since 2020, and the crop has exploded across Victoria and South Australia while creeping into places like Western Australia and New South Wales. Growers point to input cost pressures and the United States and Iran conflict as factors, noting that lentils use less nitrogen than alternatives such as canola.
That surge in supply is now weighing on prices. Having pushed beyond 1,000 dollars a tonne a couple of years ago, lentils are now fetching around 660 dollars delivered into Melbourne and Geelong, and about 640 dollars in South Australia. According to market analyst Nick Crundle of Market Check, prices remain solid but are trending lower, reflecting an improved season, more acres and large stocks still sitting in Victoria from last harvest.
Those stockpiles are unusually large this year. Crundle says more than half of last year's lentil harvest from Victoria is yet to be sold, after the state grew around 920,000 tonnes and exported roughly 300,000 tonnes season to date. With about 85 percent of the lentils produced in the country sent overseas and little used domestically, much of the balance is sitting in growers' sheds and silos as producers hold out against lower prices.
Lentils are typically marketed as a high-value cash crop, with growers banking on a strong price at harvest to generate income, but this year has been the opposite in Victoria. Crundle describes the broader grain market as tough at the moment, with prices volatile. The reluctance of growers to sell at current levels has added a little support to an outlook that is otherwise struggling to find a rally.