UPDATE 1-Australian farmers tipped to harvest second-biggest wheat crop on record

(Adds quote from farmer)

SYDNEY, Dec 1 (Reuters) - Australian farmers are on track to harvest their second-biggest-ever wheat crop after years of drought, as the country’s chief forecaster raised its production estimate on Tuesday by nearly 10% to more than 30 million tonnes because of favourable rainfalls.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said wheat production during the 2020/21 season would total 31.17 million tonnes, up from a September estimate of 28.91 million tonnes and not far off the country’s all-time high of 31.8 million tonnes in 2016/17.

“Favourable rainfall during September and October was perfectly timed for the growth cycle,” ABARES Executive Director Steve Hatfield-Dodds said in an emailed statement.

The bumper crops, already being harvested in many parts of the country, are likely to weigh on benchmark prices, which hit a six-year high last month.

Many of the areas worst hit by the three-year drought, including in the eastern state of New South Wales (NSW), are now leading the agricultural recovery that will help the economy recover from its first recession in 30 years after large swathes of business were shut down to slow the spread of COVID-19.

“It was a dust bowl this time last year in many areas; what wasn’t dust caught fire,” NSW Farmers Vice President Xavier Martin told Reuters. “Farmers are now going into their paddocks and finding higher yields than expected.”

Grain farmers in NSW are forecast to harvest 12.2 million tonnes of wheat this season, making it the country’s biggest wheat-producing state.

Although ABARES also lifted its barley production estimate to 11.96 million tonnes, up from its September prediction of 11.2 million tonnes, barley growers face bleaker prospects.

China this year imposed anti-dumping and anti-subsidy duties of 80.5% on Australian barley imports, effectively halting a billion-dollar trade.

Reporting by Colin Packham and Jonathan Barrett; Editing by Edwina Gibbs and Gerry Doyle