| SYDNEY, April 11
SYDNEY, April 11 Australian farmers will
maintain wheat acreage during the 2017/18 season at a near
three-year high, farmers and analysts said on Tuesday -
rejecting incentives to plant alternative crops amid low prices
and unfavourable weather forecasts.
Australia - the world's fourth-largest wheat exporter - will
begin planting wheat crops in the next few weeks and despite
benchmark prices lingering near a decade low, farmers will
maintain wheat acreage at similar levels to last year, the
highest since 2014.
Profarmer - a widely watched private forecaster - estimates
wheat acreage for the upcoming season at 13.4 million hectares
(33.1 million acres), down just 1 percent from the 2016/17
"I'm largely planting the same amount of wheat as last year
though. While the terms of trade have deteriorated quite badly
in the last 12 months, we are a wheat producing country," said
Terry Fishpool, a grain and livestock farmer in Tottenham, 500
kilometres (311 miles) northwest of Sydney.
Wheat planting typically begins around April 25, and wheat
prices are down about 10 percent from that date a year ago as
ample global supplies weigh on grain prices, which is expected
to continue well into next season.
But while wheat acreage is set to remain consistent,
production is expected to fall sharply.
Australia's chief commodity forecaster last month pegged
production of wheat at 23.98 million tonnes, down 32 percent
from the record crop produced last year as dry weather crimps
The record production provided a timely boost for the
economy. Buoyed by record wheat output, rural commodities
accounted for a nearly a fifth of Australia's fourth-quarter
2016 gross domestic product growth, a huge relief for
policymakers after the third quarter's shock 0.5 percent
Economists already expect the benefit of agriculture to
wane, but the threat of an El Nino threatens to add to the drag
on the country's economy.
Australia's Bureau of Meteorology said the chance of an El
Nino is 50 percent.
"Yields are what got farmers through last season. Prices
aren't likely to materially rise higher so an El Nino would
really worry farmers and have broader implications," said Phin
Ziebell, agribusiness economist, National Australia Bank.
(Reporting by Colin Packham; Editing by Christian Schmollinger)