Australia's wheat harvest to fall 26% amid fertilizer cost surge

Australia’s wheat harvest is projected to shrink by roughly a quarter, with output expected at 26.7 million metric tonnes—about 9 million tonnes less than the previous season. The decline reflects a 12% reduction in planted area, driven by soaring fertilizer prices linked to the Iran war and persistent dry conditions across the eastern states.

ABARES warned that "it will be crucial that adequate and timely supply of fertiliser is available and adequate rainfall is received to meet current yield projections." Farmers are shifting to less fertilizer‑intensive crops such as barley (up 4% to 5 million hectares) and canola, though overall production of these alternatives also falls. The reduced Australian output, as a major global wheat exporter, is expected to tighten international supplies and support higher wheat prices.

The outlook includes further challenges from an anticipated El Niño and below‑median rainfall in coming months, underscoring the vulnerability of the Australian grain sector to geopolitical and climatic shocks.