Some say they are dumping it by the roadside.

Small-sized diseased wheat, disguised in what looked like a bumper crop until the harvest began, is a legacy of the El Nino weather effect which Australia appeared to escape.

After inflicting drought, crop failure and forest fires on Papua New Guinea and Indonesia, El Nino's final twist has been the destruction of large tracts of grain in the Australian states of Queensland and northern New South Wales.

Ironically, this has occurred not through the drought which the weather effect normally brings but through torrential rain as El Nino began to wane.

"They're dumping it on the side of the road -- piles and piles of it," a grain futures broker said of the small-sized, "pinched" grain coming off in the present harvest.

Big wheat producers, and the Australian Wheat Board, challenge the description. But they confirmthat little mountains of unusable wheat are growing on farms in the two states as financially hard-hit growers try to work out what, if anything, can be done with the grain.

"A lot of grain is so badly damaged that nothing can be done with it," a spokesman for AWB Ltd, the re-named Australian Wheat Board, told Reuters.

Brendan Stewart, general president of the Queensland Grain Growers Association, said most growers were "stockpiling (grain) on farm" rather than "dumping it on the roadside" -- although some had threatened to do so.

Stewart described the wheat quality as "extremely bad" in some areas, particularly central and southern Queensland.

The central Queensland crop suffered rain damage at harvest time. The southern Queensland crop was hit by wet weather throughout the growing season, leading to disease infestation, particularly yellow spot, which Stewart describes as having had a huge impact on yield and quality.

"The crop looked extremely good to drive past it (or) even walk through it...almost like a record, and a lot of people thought that was what we were going to get," he said.

"But when the harvesters went in there's been in some instances up to two-thirds to three-quarters less quantity than they thought and the quality is so badly damaged by the disease its basically undeliverable," he said.

"There's a huge Financial loss to all those producers in that situation," said Stewart, a big wheat grower himself at Chinchilla on Queensland's Darling Downs.

A proportion of the grain would be able to be graded and sold, but the fate of the rest of it is totally unknown.

"Some of it might have to be dumped," Stewart said.

Much of the grain was too small to even be put through a mill to crack it to turn it into cattle feed, he said.

"It's not even any good for cattle feed unfortunately, some of it."

Recent downgrades of the Australian crop because of a variety of weather problems, including frost, drought and floods, have cut forecast output from an initial possible record of 24million tonnes to about 21 million tonnes.