Australia’s wheat production falls as 2026/27 barley crop strengthens
Australia’s 2026/27 wheat production is forecast to fall by 4 million tonnes to 32 million tonnes, while barley output is expected to reach a record 17.7 million tonnes. Higher nitrogen costs and El Niño concerns are encouraging barley planting, with strong export prospects for both grains.
AUSTRALIA – Australia’s wheat production is forecast to decline in the 2026/27 marketing year, while barley output is expected to increase, reflecting changing planting decisions, favourable growing conditions in southern states and higher nitrogen fertilizer costs, according to the US Department of Agriculture’s Foreign Agricultural Service (FAS).
Wheat production is forecast at 32 million tonnes, down approximately 4 million tonnes from the previous year but remaining about 10% above the 10-year average.
In contrast, barley production is projected to reach 17.7 million tonnes, up around 700,000 tonnes, or 4.4%, year-on-year.
The forecast would represent Australia’s second consecutive record barley crop and place production about 40% above its 10-year average.
The shift reflects changes in growers’ crop choices as farmers respond to input costs, seasonal risks and relative crop profitability.
Higher nitrogen fertilizer prices, linked to the ongoing conflict in the Middle East, have encouraged some producers to favour barley over wheat and canola, which generally require higher nitrogen inputs.
The prospect of El Niño-related moisture stress has also influenced planting decisions, particularly in eastern Australia, where drier conditions could affect yields.
Barley’s comparatively lower fertilizer requirements have strengthened its appeal to growers seeking to manage production costs while maintaining returns.
Despite the expected decline in wheat output, Australia’s export outlook remains strong.
Wheat exports are forecast at 25 million tonnes, the third-highest volume on record and well above the 10-year average of 20.4 million tonnes.
Improved international wheat prices could encourage growers and exporters to release stocks retained from the previous season.
Barley exports are projected to reach 13 million tonnes, potentially marking a second consecutive record and significantly exceeding the 10-year average of 7.3 million tonnes.
China remains the dominant destination, accounting for an estimated 75% to 80% of Australia’s barley exports.
Demand recovered strongly after Beijing removed its 80% tariff on Australian barley in August 2023, although export concentration in one market remains a risk for Australian suppliers.
Saudi Arabia has also re-emerged as a source of demand, offering some diversification opportunities.
The production outlook has important implications for Australia’s grain handling, storage, milling and feed manufacturing industries.
Higher barley availability could strengthen supplies for livestock feed producers and maltsters, while export terminals may need to accommodate substantial shipments to Asian and Middle Eastern markets.
However, abundant supplies could place downward pressure on barley prices during harvest before export demand supports a recovery.
For wheat millers, the projected decline in production could affect domestic grain availability and procurement costs, although the anticipated export volume suggests Australia will remain a major supplier to international markets.
The balance between export demand, domestic consumption and regional harvest outcomes will be important in determining prices and grain flows.
Weather conditions remain a key uncertainty for both crops, particularly in regions facing limited rainfall.
Ultimately, Australia’s 2026/27 season illustrates how fertilizer affordability, crop margins and climate expectations can reshape planting patterns and influence the global supply of major cereals.
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Source : Milling MEA
