September 13, 2018 / 2:14 AM / 3 months ago

Australia weather bureau says dry conditions likely to persist for rest of year

FILE PHOTO: A lone tree stands near a water trough in a drought-effected paddock on Jimmie and May McKeown's property located on the outskirts of town of Walgett, in New South Wales, Australia, July 20, 2018. REUTERS/David Gray/File Photo

SYDNEY (Reuters) - Dry weather across Australia’s east coast will linger until 2019, the country’s meteorological bureau said on Thursday, extending drought conditions that have hit rural production and threatened the broader economy.

Australia’s Bureau of Meteorology said in its latest three-month outlook that there was just a 35-percent chance that much of the country’s east coast would receive average rainfall between Oct. 1 and the end of the year.

Dry conditions are expected in the Northern Territory as well, which also has a 35-percent chance of average rains.

Such weather could pile further pressure on production of crops such as wheat and corn, while cattle farmers may be forced to increase slaughtering at a time of ample global supply of beef.

“There are parts of the country that really need some rain, without them they could see production estimates come off,” said Phin Ziebell, agribusiness economist at National Australia Bank.

“The outlook covers the wet season for Australia’s north. Cattle farmers may have to liquidate their herds and then who are they going to sell to? Australia’s biggest market - the United States - has ample supplies.”

Australia earlier this week cut its forecast for 2018/19 wheat production by nearly 13 percent as result of dry weather, which is likely to curtail exports from the world’s fourth largest exporter of the grain.

Australia will next week update its forecast for beef production.

With rural output typically accounting for around 3 percent of Australia’s economy, the country’s central bank in August warned that the severe drought that has dried out grazing and crop land in the east would cause a potential headwind to the economy.

Reporting by Colin Packham; Editing by Joseph Radford

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