Severe dry to cut grain harvest in half

The severe dry that has smashed crops in NSW and southern Queensland is expected to slash total grain production this season and affect business conditions in farming communities where grain is a key industry, the nation's largest agribusiness has warned.

GrainCorp's underlying net profit surged in fiscal 2017 to $142 million.

Discussing GrainCorp's bumper full-year results for fiscal 2017, including an underlying net profit that nearly tripled to $142 million, managing director Mark Palmquist said this year's harvest would be "tremendously smaller", and in response the company would run a leaner harvest operation, with some sites to stay closed because of the lower volumes.

GrainCorp, an integrated grains handler, exporter and processor, said while the crop would be substantially smaller than last year, production would be skewed towards Victoria and southern NSW.

Rabobank senior grains and oilseeds analyst Cheryl Kalisch Gordon said Rabobank had forecast a "national drop of 41 percent from last year's record grain harvest. This is also down 19 percent on the five-year average prior to last year, which really puts the drop in context.

Read Darren Gray’s story in the Melbourne Age - “Severe dry to cut grain harvest in half.”