Forecasting national grain stocks in times of drought
XIA Charley

Forecasting national grain stocks in times of drought

Technical reports

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This paper reports on a project conducted by ABARES from May to July 2019 to explore the role that public sector forecasts of grain stocks can play in reducing market uncertainty in years of low production – usually caused by drought. The project extended the methodology used to produce the Australian Crop Report to validate ABARES forecasts of consumption and stocks. In drought years, the problem faced by bulk grain users such as intensive livestock and food manufacturers is whether to rely solely on domestic supplies when prices rise, or whether to commit to the costly process of importing. A key factor in deciding to import is the availability and price of grain from domestic sources, and public stock reporting provides an independent source of information that helps improve the efficiency of price formation. Semi-structured interviews were conducted between May and July 2019 around scenarios that captured the impact of likely climate conditions in 2019 on grain production for the marketing year 2019-20. The consultation process led ABARES to revise wheat and barley stocks downwards for 2018-19 and 2019-20. ABARES concluded that public reporting of national grain stocks in times of drought can help grain consuming businesses work out whether and when to invest in the cost of importing. However, in years conducive to crop production and exports, it is not efficient for ABARES to commit additional resources to estimating grain consumption and stocks.

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ABARES : Australian Bureau of Agricultural and Resource Economics and Sciences : Department of Agriculture

XIA Charley
BROWN Amelia
MILLER Matthew

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Use constraints: copyright
All material in this publication is licensed under a Creative Commons Attribution 4.0 International Licence, save for content supplied by third parties, logos and the Commonwealth Coat of Arms.
Other constraints: This publication (and any material sourced from it) should be attributed as: Xia, C, Brown, A, Agbenyegah, B, Collins, P, Miller, M, Cameron, A., & Nelson, R, 2019, Forecasting national grain stocks in times of drought, ABARES technical report 19.6, Canberra, November. CC BY 4.0.

ISSN 189-3128
ISBN 978-1-74323-454-9

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