The tragedy of the Ukraine/Russia conflict has created a resounding ripple effect across the globe, throwing the international wheat market into disarray. Agribusiness experts suggest that Australian farmers should prepare their product to make up the gap in the market.

In 2020 the Russian Federation and Ukraine made up a combined 25.6 per cent of wheat exporters in the world, with that number expected to fall dramatically amid the ongoing conflict. 

Lake Cargelligo based grain broker Craig Tyack said that Australian grain prices are already starting to rise. 

“People want to buy it off us because they can’t get it off Russia and Ukraine. We’re already seeing it happen with existing stock and forward contract prices going up,” Mr Tyack said. 

Charles Sturt University Agribusiness lecturer Dr Richard Culas said that to best capitalise on this year’s harvest, farmers need insight into international consumption patterns and quality requirements. 

“Australia should focus collectively on productivity increments, quality enhancements, and wheat crop product diversification through innovative ways of reducing costs and increasing yields to make Australian wheat more competitive,” Dr Culas said. 

According to predictions from Rabobank, Australian wheat prices have the potential to rise from the current $367 a tonne to $425 a tonne in the near term.

What could limit Australia’s capacity to take up market share, however, is the supply chain. 

“Though Australia physically can have a good harvest of wheat to cover up the exports from the Black Sea region (Russian Federation and Ukraine), logistics can be an issue since there are only so many trains and trucks to load to get grain to the ports,” Dr Culas said. 

With above average rainfall this year, however, the supply should be there. 

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has forecast a wheat crop output of 34.4 million tonnes for 2021–2022, up from 32.6 million tonnes of its previous forecast (5 per cent more).

In contrast, other major wheat exporting countries like the US (the world’s second largest producer) are expecting a fall in yield by 10 per cent this year, and Canada expected a 39 per cent fall in yield in 2021. 

According to Mr Tyack, the difference isn’t limited to wheat, with canola and barley prices soaring too. 

Local farmers who can meet the growing demand could benefit from the highest price in 14 years.