Government agricultural forecasters in Australia are predicting a bumper winter crop, which should help to meet soaring demand from Asia.
In Australia, the higher food commodity prices are good news for farmers after years of drought.
This year's winter grain crop in Australia, including wheat, barley and canola, is forecast to be 41 million tons, which although slightly lower than last year's harvest would still be one of the best yields on record.
Analysts say sustained rainfall in recent months in many farming regions should help to more than double the production, last year, during the worst of a drought that gripped Australia for almost a decade.
Australia’s wheat crop is expected to reach 26 million tons and about 80 percent of it is likely to exported, which would mean Australia would move ahead of the European Union as the world’s second-biggest wheat supplier, behind the United States.
Craig James, an economist at CommSec, a large stockbrokerage company, says high prices, caused largely by strong demand for food in Asia, and decent rains are welcome news for Australian farmers.
"Unfortunately the high Australian dollar is putting a bit of a dampener on the overall scheme of things but as income levels increase across the Asia region, that's going to mean higher demand for food, for grains more generally and that's good news for Australia," he said.
However, a lack of winter rain means that production in Australia’s most populous states, New South Wales and Victoria, as well as further north in Queensland could be lower than last year.
Any shortfall in the east, though, is likely to be made up by bumper crops in Western Australia, Australia’s top wheat exporting state. Its premium wheat is used to make bread and noodles. It is also a favorite of East Asian countries, such as Vietnam and Taiwan.
Although the high prices are good news for Australian farmers, the World Bank says they are having the opposite affect among consumers in Asia. World Bank analysts recently reported that rising food prices pushed another 44 million people into extreme poverty last year.
Analysts say greater yields and increased grain exports from Australia, as well as Canada, the United States, the European Union and Ukraine, would add to global supplies, and could curb prices that have risen by 19 percent since July First, caused, in large part, by drought across the Great Plains in the United States.
The Australian government says that greater trade reform is urgently needed to stop vast numbers of people going hungry, amid concerns of food shortages later this year in parts of Asia.