Australia’s grain and pulse future looks strong, but it will not be simple
The future of the Australian grain and pulse industry still looks fundamentally strong. Australia remains one of the world’s major export-oriented grain producers, and grains, oilseeds and pulses have been the fastest-growing agricultural export group over the past 20 years, growing at an average annual rate of 9% in real terms. In the three years to 2024–25, 71% of Australian agricultural production was exported by volume, and wheat on its own was even more export-focused at 75%. That tells you something important straight away: the future of the sector will be shaped not just by what Australia can grow, but by what overseas customers want, what they are prepared to pay for, and how easily Australia can reach them.
At the same time, the industry is heading into that future with scale. ABARES says the 2025–26 winter crop is expected to be the second highest on record, with wheat production at just under 36 million tonnes, barley at a record 16.3 million tonnes, lentils at a record 2.0 million tonnes and chickpeas at 2.2 million tonnes, the second highest on record. But ABARES is also forecasting that the value of crop production and grain exports will ease in 2026–27 as volumes and prices come off their recent highs. So the future is unlikely to be a simple story of “more tonnes equals more profit.” It is more likely to be a story about managing volatility better, extracting more value from quality, and becoming more precise about where Australian grain and pulses fit in global markets.
Export demand will keep driving the industry
The Australian grain and pulse sector is not heading toward a domestically led future. It is heading toward a more sophisticated export-led one. That is especially true for pulses. GRDC’s 2026 market update says lentils are almost entirely exported and mainly sold into food markets, with India and Bangladesh together taking about 70% of Australian lentil exports since 2022. It also says Bangladesh, Pakistan and India remain the foundation markets for desi chickpeas, while faba beans are finding growing demand not just in Egypt and the Middle East but also in South-East Asia, particularly Indonesia and Vietnam, for aquafeed and snack-food uses.
That matters because it means the future demand story is not one market, one crop or one customer. It is a mix of large traditional food markets, smaller diversified food markets, feed demand, and emerging ingredient markets. Lentils still depend heavily on South Asia, but their export base is relatively diversified. Chickpeas remain highly exposed to India’s production swings and tariff decisions. Faba beans are benefiting from new aquafeed and protein opportunities. Lupins remain a feed crop first, but food and plant-protein uses are growing. In other words, the future pulse market is not replacing the old trade; it is layering new opportunities on top of it.
For grains, the same broad principle applies. Grains Australia said in November 2024 that South-East Asia remains Australia’s most valuable wheat export region, and it launched new work to update wheat quality preferences in that market so the industry can make better decisions around breeding, production and classification. That is a clear sign of where the future is heading: not toward generic bulk grain, but toward grain that is increasingly matched to customer preferences by region and end use.
Trade access may matter almost as much as production
One of the biggest future themes for the industry is that market access will matter almost as much as agronomy. Grains Australia reported in February 2026 that existing non-tariff measures on Australian grain exports are equivalent to a 20.4% tariff and are linked to an estimated $4.6 billion in forgone export revenue each year. That is an enormous number, and it shows that the future profitability of the industry will depend not only on growing better grain, but also on reducing friction at the border, maintaining phytosanitary confidence, and navigating the technical rules of overseas markets more effectively.
Pulses make this especially obvious. In March 2025, Grains Australia reported that India had reinstated tariffs on Australian lentils and desi chickpeas, with lentils facing an effective 11% tariff from 8 March 2025 and desi chickpeas an effective 10% tariff from 1 April 2025. It also said Australia had shipped 1.2 million tonnes of desi chickpeas alone to India in the marketing year to the end of January 2025. So one government policy decision in a single market can shift planting sentiment, pricing and export programs very quickly. The future pulse industry will need to be commercially nimble, but it will also need constant diplomatic and technical market engagement.
That is one reason market diversification is becoming more explicit. Grains Australia says it was selected in January 2026 to join Austrade’s new Trade Diversification Network, part of a $50 million initiative aimed at helping exporters grow and diversify markets. Read together with its market-insights and classification work, that suggests the industry knows the next decade will reward breadth of market access, not overdependence on one destination.
Technology will shape the next decade, especially in breeding
The biggest technology story in Australian grain and pulses is not flashy machinery on its own. It is the convergence of breeding, phenotyping, genomics, classification and market intelligence. Grains Australia says its classification systems are designed to meet end-user needs while reflecting the latest agronomic improvements and breeding opportunities. That means the future variety is not just a higher-yielding variety; it is a variety bred with a clearer commercial target in mind.
That is particularly clear in pulses. GRDC is investing $17.9 million across five pulse pre-breeding projects covering chickpeas, faba beans, lentils, lupins, mungbeans and field peas, with a strong focus on lifting genetic diversity, disease resistance and tolerance to environmental stress. GRDC says researchers are aiming to increase annual yield gains in chickpeas, faba beans and lentils from about 0.5% to 1.5% through genetic improvement. On its active investment pages, GRDC says this work is using genomic prediction, speed breeding and AI-guided precision breeding to build more robust, higher-yielding varieties better adapted to Australian conditions.
Climate adaptation is part of that same story. GRDC’s chickpea work says high temperature is a significant threat to chickpea production in Australia’s current and future growing regions, and one project is using drone-based multispectral and hyperspectral phenotyping, genomic prediction frameworks and AI-guided breeding to reduce yield loss from heat stress by 30% by 2034. That is a glimpse of what the next phase of Australian grains research looks like: not simply selecting better-looking plots, but combining field trials, sensors, controlled environments, data science and breeding to solve specific climate-related constraints.
Sustainability will increasingly be built into profitability
Another future trend is that sustainability will be less of a separate conversation and more of a profitability conversation. Pulses already matter because they provide rotational diversity, nitrogen and risk management in farming systems. GRDC’s 2026 pulse market update describes pulses as a core profit and risk-management tool, not just a niche commodity.
That on-farm value is now being pushed further by breeding work. GRDC says an active project on symbiotic nitrogen fixation aims to develop pulse genotypes with greater capacity to capture atmospheric nitrogen, and its 2025 update paper says the goal is for future varieties to derive at least 10% more nitrogen from fixation than current varieties. GRDC also says that could reduce the need for nitrogen fertiliser in farming systems and lower greenhouse gas emissions and nitrogen pollution. In practical terms, that means the future pulse industry is likely to be sold not just on market price, but also on its contribution to lower-input, more resilient cropping systems.
Value-adding and plant protein are real opportunities, but not a replacement for bulk trade
The future of the industry is not only about exporting raw grain more efficiently. It is also about deciding where Australia can add more value before export. CSIRO’s protein roadmap says Australia has a potential additional $13 billion protein opportunity by 2030 as global demand grows for more protein from a wider range of sources. Its related work on plant protein processing hubs shows that Australian researchers and industry are already scoping regional supply chains for legume and oilseed protein crops, their processing requirements, their potential products and their likely customers.
GRDC’s latest work on pulse proteins points in the same direction. GroundCover reported in February 2026 that growers are being given information to help target niche food-processing markets, including grain with high protein content for protein powders, and that future breeding programs may increasingly target those protein-related traits. That does not mean bulk exports are going away. It means part of the future may involve a more segmented industry, where some grain still moves as bulk commodity tonnage while some pulses and specialist grains are bred, stored and sold into higher-value ingredient channels.
Quality, classification and customer fit will become even more important
One of the clearest signals from the market is that “good grain” will not be defined as broadly as it once was. Grain that meets the right specification for the right customer will keep gaining value relative to grain that is merely sound and abundant. Grains Australia’s work on wheat preferences in South-East Asia, and its broader role in classification, market education and technical market solutions, all point the same way: the future industry will need tighter alignment between breeding, classification, receival, segregation and end-use performance.
Pulses are moving in the same direction. Grains Australia says the first national lentil variety classification framework is now in place, and that it is intended to guide classification frameworks for additional pulse crops. That may sound technical, but it is commercially important. It means the pulse industry is moving toward the same kind of clearer quality differentiation that has long existed in wheat and barley. The likely long-term effect is a more market-led pulse sector, where functional traits and end-use fit matter more at the breeding and marketing stage than they used to.
The future is promising, but it will reward the best operators more sharply
The most likely future for the Australian grain and pulse industry is not decline. It is sharper competition. The volume base is strong, the export engine is strong, and the research pipeline is real. But the sector will probably become more demanding, not less. High global grain production and large carryout stocks are already expected by ABARES to weigh on wheat prices in 2026–27, even while Australian output remains strong. That means margin will increasingly come from execution: better varieties, better quality fit, stronger market access, smarter logistics, more resilient farming systems and better use of data and technology.
So the future of the Australian grain and pulse industry is best understood this way: it will still be export-led, but more diversified; still be volume-driven, but more quality-sensitive; still be grounded in bulk commodities, but with more value-added niches; and still depend on agronomy, but with much more influence from breeding technology, market intelligence and trade policy. The growers, traders, handlers and processors who do best will not just be the ones who produce more. They will be the ones who match Australian grain and pulses more precisely to what the market wants next.
