Listen: Could Aussie drought affect NZ bread prices?

Rabobank agricultural analyst Wes Lefroy. Photo / Supplied

Weather extremes in Australia have led to a shortage in milling wheat exports, but New Zealanders shouldn't worry about paying more for their daily bread just yet, says Wes Lefroy.

Rabobank's agricultural analyst told The Country's Jamie Mackay that devastating drought and damaging frost has delivered Australia's smallest winter grain crop in 10 years.

"It will go down as one of the worst in Eastern Australia's history," says Lefroy, who reveals the crop has dropped 23 per cent on last year, and is 31 per cent below the five-year average.

Listen below:

New Zealand imports around 500,000 tonnes of milling wheat from Australia and Lefroy speculates we may look to other countries for supply, depending on prices and freight.

This means the price of bread may not be affected that much.

"The cost of wheat only makes up a proportion of around 10 to 15 per cent of a loaf of bread so ... given that the cost of wheat is a small component of the loaf of bread, it will vary as to whether the cost of bread goes up significantly."

Also in today's interview: Wes Lefroy looks at how a global wheat shortfall could benefit New Zealand grain growers and talks about how Western Australia is bucking the trend and succeeding with winter crop production.