WASHINGTON, D.C., U.S. — The U.S. Department of Agriculture on Oct. 12 forecast Australian wheat production and exports in 2018-19 to be the lowest since 2007-08.

The USDA forecast Australian wheat production in 2018-19 at 18.5 million tonnes, down 1.5 million tonnes from the September outlook, down 2.8 million tonnes, or 13%, from 21.3 million tonnes in 2017-18 and compared with a record 31.8 million tonnes in 2016-17. The USDA’s initial forecast for the 2018-19 Australian crop, which was issued in May of this year, was 24 million tonnes.

The Australian crop was forecast to be the smallest since 13.6 million tonnes in 2007-08. That crop came on the heels of a disastrous outturn of 10.8 million tonnes in 2006-07.

The USDA in its October Wheat Outlook said, “Exceptionally dry, warm weather, particularly during the critical month of September, shriveled wheat in most growing regions of eastern Australia. According to the Australian Bureau of Meteorology, at the national level, it was the driest month of September on record.”

New South Wales, which in some years accounts for up to 40% of Australia’s wheat crop, has endured sustained drought. Wheat yields in the state were expected to be the lowest since the 2007 drought. The USDA said precipitation beyond this point may only marginally help a fraction of the crop that was planted later in the season “but is unlikely in any substantial way to improve yields of a crop which is mostly beyond its reproductive period and is going through the final states of maturity.”

The USDA observed conditions had been much more favorable in Western Australia, but poor precipitation there in September reduced yield potential. October rains in the state stabilized yield prospects, but frost was reported recently, and the extent of possible damage to the crop was unclear. Wheat production in Western Australia will not be able to offset crop losses in the eastern states, the USDA said.

Some private analysts suggested Australian wheat production may fall below the USDA forecast by as much as 2 million tonnes.

The USDA forecast Australian wheat exports in 2018-19 at 13 million tonnes, down 1 million tonnes from the September outlook, down 1.5 million tonnes, or 10%, from 14.5 million tonnes in 2017-18 and compared with 22.6 million tonnes in 2016-17. Australia exported a record 24.7 million tonnes of wheat in 2011-12.

The forecast outgo for 2018-19 was the lowest since 7.5 million tonnes was exported in 2007-08.

The initial USDA forecast for Australian wheat exports in 2018-19, issued in May, was 17 million tonnes.

The USDA observed, “Not only are Australian wheat supplies diminished, but it is also unlikely that the eastern states will export any substantial amount of wheat. Additionally, wheat originating in Western Australia that under normal conditions would be exported is going to be transported from Western Australia to New South Wales and Queensland. These two states greatly need animal feed this year, as the drought not only shrank their wheat harvest, but also destroyed pastures.”