Horizons #84 – More to celebrate….well done grains industry!

19 January, 2023

by Professor Ross Kingwell, AEGIC Chief Economist

Hats off to Australian farmers, advisers and scientists; a gold star national performance!

In AEGIC blog #82 late last year I shared farm performance metrics for grain dominant farm businesses in Western Australia (WA) that revealed their remarkable achievements. It was a cause for celebration. The WA grains industry has recorded consecutive record grain harvests, 24.0 mmt in season 2021 and 26.1 mmt in season 2022!  (GIWA estimate).

More recent national analyses, undertaken for AEGIC by agrometeorologist Dr David Stephens, reveals further evidence, this time for national celebration – not just for WA. It’s hats off to Australian farmers, advisers and scientists. The analyses reveal remarkable growth in the water use efficiency that underpins Australian wheat production.

Most grain production in Australia is rainfed. Hence, achieving high yields depends on how successfully farmers can turn rain into grain. The metric often cited to indicate how well farmers turn rain into grain is water use efficiency (WUE). Chart 1 displays the changes in the WUE of wheat production in west and east Australia, and for all of Australia.

Chart 1: Water Use Efficiency of wheat production in Australia. Source: Agrometeorology Australia

Results in Chart 1 indicate that growth in WUE has occurred over the period 1980 to 2021 in each major region of Australia. Yes, there was little growth in WUE during the millennial drought in eastern Australia when yields were depressed and applications of nitrogen were slashed, but since then the upward trajectory of WUE has continued.

Enhanced WUE is a key reason for Australia’s increasing wheat yields (Chart 2).

Chart 2: Trends in wheat yields across Australia: 2004 to 2020 (kg/ha/yr)

Since the late 2000s remarkable increases in the trend of wheat yields have occurred in southern Australia, especially in parts of South Australia and Victoria, and in many parts of New South Wales.

Although some statistical sub-divisions in WA display yield trends over the period 2004 to 2020 less than those recorded in parts of other States, nonetheless wheat production in WA is remarkably reliable (Chart 3). By contrast, marked volatility in wheat yields characterises wheat production in many statistical sub-divisions in New South Wales and Victoria.

Chart 3: Variability of wheat yields across Australia: 2000 to 2020 (Coefficient of variation of wheat yields as a %)

All these metrics ― improved water use efficiency, upward yield trajectories and reliable wheat production (especially in WA) are sound reasons for celebration by the Australian grains industry, noting that wheat is by far the main grain grown and exported in Australia.


Banner image: October 2022 – Bordertown grower Gary Virgin in the rain giving an update on the 2022 season for AEGIC’s virtual crop inspection series.

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Horizons: the AEGIC Economics and Market Insights blog

Expert grains industry analysis and commentary from AEGIC’s Economics and Market Insight Team on a range of big-picture topics that affect Australia’s export grains sector.

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