After an extended period of reporting similar conditions, above average rainfall, prolonged wet conditions and expectations that this would continue, we are now seeing a clear contrast on the horizon.
The most recent La Niña event has been weakening over late summer and is appearing to be near its end, with both oceanic and atmospheric indicators now moving toward neutral El Niño-Southern Oscillation (ENSO) values.
The ENSO forecast plays an important role in tracking the movement of ENSO through La Niña, neutral and El Niño phases.
Looking ahead, climate models used by the Bureau of Meteorology has indicated that this move toward neutral sea surface temperatures in the tropical Pacific Ocean is likely to remain throughout autumn, before touching on El Niño thresholds coming into the winter.
This outlook is contributing to the heightened likelihood of below median rainfall across most of the country over the next three months.
While this is quite a shift from recent times in many areas, bolstered water resources and soil moisture built up over the same time period will prove supportive moving into the next couple of years.
With many water storages at capacity, and no further resource assessments needed across northern Victoria and the NSW Murray, many will remain confident, at least in the short term.
This confidence has flowed through to temporary water prices, which are currently 72 per cent and 70 per cent below last year across northern Victoria and the Murray Irrigation system respectively.
In light of this, and despite coming into the next season with an outlook of below median rainfall, a jump in both the demand and price of water will be somewhat mitigated by the resources available.
Fodder and feed
In terms of fodder and feed production, across the cropping areas of southern and central Australia, there are now expectations of a delayed autumn break.
Dependent on soil moisture levels, this has the potential to weigh on predicted planted areas for hay crops and therefore the ability of many to make up for the fodder supply shortfall stemming from last season.
For pasture growth, this outlook will likely bring a mixed response, but definitely a welcomed change for those who battled waterlogged paddocks last year.
Alongside low water prices and cooling temperatures, an equal chance of either above or below median rainfall for parts of south-east Australia, is likely to support pastures over the next few months, dampening demand for purchased feed for the same period.
For a number of grain producing areas, this longer-term outlook and expectations of a delayed autumn break is in addition to a very dry few months over summer.
This has led to drying soils in these areas and is now likely weighing on cropping decisions and prioritisations for the coming season.
For areas that experienced an above average season last year, there are some reports of growers choosing to take a step back this season, in response to this outlook and the high costs they are facing.
While the material impact of such decisions is fairly unclear due to the bumper harvest in 2022, grain prices are likely to remain high while international interest persists.
Fertiliser forecast
Incessant rainfall, waterlogged paddocks and high fertiliser prices all reduced applications in spring 2022.
As expected rainfall reverts closer to median levels, alongside easing prices, this will be a likely contributor to increased fertiliser use over this coming season.
However, with fertiliser prices again at the whim of global influences, many are likely to continue facing above average fertiliser costs this year.
So, in conclusion, while this outlook is a definite shift from the conditions many have become used to over the last couple of years, the price of both water and feed are likely to remain relatively stable on the back of resources built up over this three-year period.