A dry spell in Australia is taking the edge off of a bumper wheat harvest, trimming supplies from one of the world’s largest exporters.
Precipitation in September, a key phase for the crop’s development, was lower than normal in the southeastern states of Victoria and South Australia, according to Bureau of Meteorology data. South Australia in particular received less than 10 millimeters (0.4 inches), half the historical average.
The southeastern states account for about a quarter of Australia’s annual harvest, and both are coming out of years of severe drought. Heavy rain in winter months had raised hopes for a strong harvest, and the Department of Agriculture’s latest report in September forecast the country’s wheat harvest at its fourth largest on record. Victoria and South Australia were expected to collect about 8.2 million tons.
However, soil moisture has now worsened, and as temperatures warm up, crops could begin to struggle, said James Maxwell, agribusiness senior insights manager at Bendigo Bank. The Bureau of Meteorology is now forecasting only a minor chance of above-average rainfall in Victoria and South Australia before the end of 2025, with the majority falling in November. However, Maxwell said if the rain comes too late, it could delay the harvest rather than helping the crop.
Australia is a major wheat shipper, and while Victoria and South Australia’s wheat harvest usually caters to domestic demand, any decline in the harvest would tighten availability across the supply chain. Farmers typically begin collecting wheat around October and will finish early next year.
‘I think there will be some cuts to production estimates, if they haven’t already been made, in the next month or so,’ Maxwell said in an interview. ‘Between South Australia and Victoria, I’d say we could see easily half a million tons, up to a million, if it was really bad.’
US chicken prices
As Americans heeded a catchphrase and indeed ate more chicken during a beef spike, poultry producers raked in profits. Now, falling chicken prices may be bringing that rally to an end.
Spot chicken prices in the United States have fallen 18 percent since their summer barbecue-season peak as key production indicators suggest supply is finally catching up with booming consumer demand.
Some of the largest global meat producers including JBS NV, Tyson Foods Inc. and Cargill Inc. have leaned on poultry profits to cushion losses at their beef businesses, which have been impacted by the worst US cattle shortage in decades. A turn in chicken’s fortunes could leave the companies more exposed to the prolonged beef slump, which isn’t expected to improve significantly before 2028.
The US has seen an increase in the number of chick placements, improved egg fertility rates and seasonally strong poultry slaughtering numbers-all pointing to rising meat supply. The US Department of Agriculture has raised its 2025 broiler production estimate for four straight months.
‘We see growing signs that the cycle could be heading down as supply bottlenecks appear to be increasingly solved,’ Banco Bradesco BBI analysts Henrique Brustolin and Pedro Fontana said in a note to clients.
Meat suppliers’ shares have been under pressure, too. JBS, the world’s largest meat producer, has lost 18 percent over the past month and fallen to the lowest since July 23. Pilgrim’s Pride Corp. – which is controlled by JBS – Tyson and Marfrig Global Foods SA have also seen declines.
Barclays Plc. on Thursday trimmed profit estimates for JBS, Pilgrim’s and Tyson Foods, citing potential pressure stemming from an earlier-than-expected seasonal decline in chicken prices.
Limiting the downside, chicken producers continue to benefit from low feed costs and resilient demand, as consumers look for cheaper alternatives than pricey beef.