OFFICIAL forecasters have downgraded Australia's summer crop by almost 30 per cent, with sorghum particularly hard hit.
The Australian Bureau of Agricultural and Resource Economics and Sciences said on Tuesday heatwave conditions in early to mid-January and, until recently, below average rainfall resulted in a less than favourable summer cropping season.
Compared with record production last year, ABARES forecast total summer crop production to be about 13 per cent lower in 2012-13, at 4.8 million tonnes. This was about 14 per cent higher than the average of 4.2 million tonnes over the five years to 2011-12.
Grain sorghum production was forecast to drop by 23 per cent to 1.7 million tonnes in 2012-13 and production of cotton lint and seed is forecast to fall by 21 per cent each to 945,000 tonnes and 1.3 million tonnes. Rice production is forecast to rise by 15 per cent to about 1.1 million tonnes.
Generally dry conditions during the growing season in the winter cropping zone are estimated to have resulted in winter crop production falling by 22 per cent in 2012-13 to 35.8 million tonnes but represent a marginal upward revision from the forecast of 35.1 million tonnes released by ABARES last December.
The executive director of ABARES, Paul Morris, said the winter crop harvest in Queensland and NSW was completed before the recent flooding and was largely complete in south-eastern Australia before the bushfires started.
"The recent flooding in some summer cropping regions has so far only caused minor damage to summer crops," he said.
Wilson HTM analyst James Ferrier said the recent rains were a "saving grace" for summer crops.
Queensland and northern NSW had "a decent amount of moisture in the soil" for winter plantings but central and southern NSW and Victoria had been dry since July-August and were approaching winter cropping season with lower levels of moisture in the soil.
Mr Ferrier said the sorghum downgrade was a "minor negative" for GrainCorp but it was too early to make an accurate prediction on the size of the winter crop this year.
GrainCorp shares traded flat on Tuesday, closing down 1¢ to $12.08 - near the level they have traded at since a takeover from US crop company Archer Daniels Midland was revealed last year.
Mr Ferrier said GrainCorp would likely finish the 2012-13 financial year with carry-out volumes much closer to historical levels and this partly explains why consensus forecasts assume earnings will decline in the 2013-14 financial year.
Mr Ferrier said that, when the sharemarket was flat or trending downwards, GrainCorp had been a "decent place to have money [but] now, when the wider market is trending up, if you're an investor sitting in GrainCorp, you're starting to get a bit anxious".