Australia's food bowl lies empty  

The BBC has a grim report on the effect of the drought on grain production in Australia.

Though located in a remote corner of the planet, the fields of Australia's food bowl are central to the worldwide price of wheat. In this part of rural New South Wales, water-starved farms and cavernous empty grain silos have the potential to create a ripple effect which spreads around the globe. And that is precisely what is happening right now.

After America, Australia is normally the second largest exporter of grain, and in a good year it would hope to harvest about 25 million tonnes. But the country remains in the grip of the worst drought in a century, which is why the 2006 crop yielded only 9.8m tonnes. Global wheat stocks are at their lowest levels since 1979, and the ongoing Australian drought is one of the reasons why. ...

Last year saw one of the best starts to a growing season for years, but dry weather in recent weeks has forced the Australian government to slash its crop forecasts by 30%.

Australia, the world's sixth-largest wheat exporter, may almost double output of the grain as farmers boost plantings to a record to benefit from higher prices.

Production may rise to 26 million metric tons in 2008-09, up from last year's drought-reduced 13.1 million tons, the Australian Bureau of Agricultural and Resource Economics said today in a report released in Canberra.

Higher output may slow gains in wheat prices that have more than doubled in the past year because of shrinking stockpiles. Record prices are prompting farmers to increase plantings, with global output forecast to climb 7 percent by June 30, 2009, the International Grains Council said last week.