Australia is facing the prospect of its smallest winter crop in more than a decade as the nation struggles through drought.

Agribusiness specialist Rabobank’s Australian Winter Crop Outlook suggests the winter crop could be just 27.7 million tonnes, the smallest since 2007/2008.

The crop this year is 31 per cent below the five-year average.

Kellogg’s has announced a price increase of their breakfast cereals due to the higher price of grain.

Rabobank grains analyst Cheryl Kalisch Gordon tells Ross Greenwood it’s inevitable prices will rise.

“We are in the third year of below-average production in grain for Australia.

“We have well surpassed the point where this can be managed without putting upward pressure on prices at the retail level.”

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