Australia less of a grain competitor in 2026-27?

SASKATOON — Canada could be facing reduced competition from one of its main grain export rivals in 2026-27.

Australia’s winter crop production is forecast at 54.5 million tonnes, a 21 per cent drop compared to the current crop year, according to the June Australian Crop Report.

That would be 12 per cent below the previous five-year average due to lower yields combined with a decline in planted area.

“They’re one of our chief competitors, especially in Asia, along with the U.S.,” said Bruce Burnett, analyst for the Western Producer Markets Desk.

Burnett thinks the forecast provided by the Australian Bureau of Agricultural and Resource Economics and Sciences sounds reasonable.

Many weather forecasters are calling for a super El Nino, which would create dry conditions for eastern Australia. And there are reports that farmers will be cutting back on fertilizer due to sky-high prices.

But Burnett cautioned that the Australian harvest is a long way off.

“You’ve got to remember, this is like projecting the Canadian crop right now,” he said.

In fact, the Canadian crop is further along because of Canada’s shorter growing season.

Why it Matters: Canada and Australia duke it out in many overseas markets.

ABARES is forecasting a seven per cent drop in the area planted to winter crops to 58 million acres.

Average to much above average February to April rainfall encouraged planting in southern Western Australia, South Australia and Victoria.

But extremely dry conditions and high input costs are expected to significantly reduce planted area in northern New South Wales and southern Queensland.

There is also uncertainty surrounding growers’ willingness to top-dress crops with pricey urea in July and August, which could impact yields.

Australia’s Bureau of Meteorology believes there is a 60 to 80 per cent chance that winter rainfall, from June to August, will be below average in cropping regions in Queensland, New South Wales, Victoria, South Australia and Western Australia.

Crop production in 2026-27 is forecast as follows:

• Wheat down 26 per cent to 26.7 million tonnes.
• Barley down 15 per cent to 14.1 million tonnes.
• Canola down 20 per cent to 6.2 million tonnes.
• Lentils up three per cent to a record 2.2 million tonnes.
• Chickpeas down 51 per cent to 1.1 million tonnes.

Burnett said the forecast reduction in wheat production would probably have the most profound impact on Canadian growers. He thinks the ABARES number is more realistic than the 30 million tonnes forecast by the United States Department of Agriculture.

All the crops mentioned in the ABARES report compete either directly or indirectly with Canada’s crops.

It’s early in Australia’s growing season. Canadian farmers should start paying more attention around the time they are harvesting their own crops.

“That’s going to be the critical time for the Australian crop, which is from late-August to October,” Burnett said.

AgPulse Analytica called Australia’s pulse production outlook one of the most divergent in years with favourable moisture conditions in the southern lentil regions offsetting persistent dryness in the northern chickpea growing areas.

AgPulse forecast 1.52 million tonnes of Australian chickpeas in a June 2026 article written for Saskatchewan Pulse Growers.

The firm said a crop that small would reduce global desi supply and potentially open import demand for Canadian yellow peas and small caliber kabuli chickpeas, supporting firmer prices and better export opportunities for Saskatchewan producers.

The ABARES forecast is substantially lower than AgPulse’s estimate, which would result in even more export opportunities.

AgPulse is forecasting 1.6 million tonnes of Australian lentils, which would keep the country competitive in overseas markets, forcing Canadian exporters to focus on quality differentiation and alternative destinations.

The ABARES outlook is much larger than AgPulse’s estimate. In fact, it’s higher than AgPulse’s most optimistic forecast of 1.78 million tonnes. That would create even more competition for Canadian exporters.