Australian wheat cultivation under pressure from rising costs

In Europe, winter cereals have been able to benefit from a reasonably favorable course of the growing season, according to the JRC in the latest Mars bulletin. A message from the American president puts pressure on raw material prices. At the other end of the world, Australian farmers are deeply concerned about the start of the new growing season. Diesel is expensive and, perhaps even worse, in limited supply, and fertilizer for winter wheat is no longer affordable, as reported in the Australian media. The May contract for wheat on the Matif closed yesterday €1 lower at €202.25 per tonne. On the CBoT, wheat lost 7½ cents to $5.87¾ per bushel. Corn closed 6 cents lower at $4.59½ per bushel. Unlike grains, soy closed slightly up on the Chicago market by 2¼ cents to $11.63½ per bushel. The growing conditions for winter cereals in the Benelux have been favorable over the past winter, writes the JRC, the scientific office of the European Commission in the new edition of the Mars bulletin. Two cold periods, the first in December and the second in mid-February, with temperatures down to -10 degrees, caused no damage to winter wheat. The predominantly dry and mild weather that is in the weather reports for our regions in the coming time is favorable for spring activities, according to the JRC. The south is wet Not everywhere in Europe is the weather cooperating so well. In Spain, Portugal, and southern France, persistent rain has caused local problems. Some rivers have overflowed, and there are fields where water is standing or has stood. Damage to winter cereals seems to be limited according to the JRC, but it has considerably hindered field work. In eastern Romania and Bulgaria, the situation is somewhat similar to that in southwestern Europe. The damage to winter cereals seems to be manageable, but fieldwork has come to a standstill. In the Baltic States and parts of Poland, a lack of precipitation is a point of concern. There is still sufficient moisture in the soil, but if the drought continues for a longer period, it could affect the further growth of the crops in this region, according to the JRC. The average wheat yield in the EU for the 2026 harvest is estimated by the JRC to be 5.98 tonnes per hectare. This is 5% lower than the previous harvest but 2% above the five-year average. That wheat in the EU is reasonably well positioned, on average, is confirmed by FranceAgriMer. 84% of winter wheat in France is doing well or excellently, according to the agency that falls under the French Ministry of Agriculture. Decree per social The decline in grain prices on the futures markets is, of course, not only due to relatively favorable growing conditions in Europe. Developments in the Middle East also play an important role in this. Yesterday, Trump sent a message to the world via his own social media channel Truthsocial that the US is in talks with Iran to end the war. American attacks on Iranian energy infrastructure have been paused for five days, according to the American president. Iran initially denied that talks were taking place with the Americans. Later, this was somewhat nuanced. Through friendly countries, there is apparently communication with the US. The unrest in the Middle East is primarily felt at the pump and through rising fertilizer prices. The same problem, and perhaps even worse, is happening in Australia. In the country down under, farmers are about to sow winter cereals. High prices for diesel and fertilizers, along with moderate grain prices, are forcing growers to make different choices in their cropping plans. In particular, wheat, which requires nitrogen, has become an expensive crop for the Australian farmer. Costs are skyrocketing The wholesale price of diesel in Australia has risen from below AU $1.70 per liter (approximately €1 per liter) to AU $2.45 (approximately €1.50). In addition to the high price, there are also concerns about the availability of diesel. According to data from the Australian government, there is diesel in stock for thirty days. The nightmare scenario for Australian agriculture is that there simply is not enough diesel for the entire growing season, as reported by various Australian media. Urea has risen from AU $870 per tonne (approximately €525) to AU $1,225 (€737). In some more remote regions, where transport also factors into the price of fertilizer, prices of AU $1,600 (approximately €963) for urea are now being mentioned. In Australia, a large portion of nitrogen is applied when sowing winter wheat. Many growers already have a supply of fertilizer on hand before sowing winter wheat. Buying fertilizer now is an expensive endeavor. Various stories from growers can be found in Australian media about cutting back on wheat acreage and instead wanting to sow lentils, chickpeas, or barley. All in all, this can have significant consequences for the grain harvest in Australia. In the worst-case scenarios, there is even talk of a halving of the harvest due to a shortage of diesel and fertilizers. It is unlikely to develop that drastically, but it is realistic that Australian farmers need to watch their costs closely, which could come at the expense of yields.