The Fodder Industry in Australia
The fodder industry is one of the most important agricultural industries in Australia. Australian farmers produce hay and silage valued at between $800mil to $2b each year, making the fodder industry larger than the barley, sugar and poultry industries.
Importantly, the availability and distribution of reliable quantities and quality fodder throughout the year is critical for the competitiveness of Australia’s multi-billion livestock industries.
The value of the Australian livestock industries to which fodder is a substantial input, contributed $17.6 billion to GDP in 2018-19, with exports valued at $16.3 billion according to Meat & Livestock Australia’s State of the Industry Report 2020.
AgriFutures Australia state that around one third of all Australian commercial scale farms (38,000 properties) make hay or silage each year. So, while some farms specialise in growing and selling fodder specifically, most produce fodder as one-component of their overall farm enterprise. While farmers may consider themselves primarily a grain grower or a dairy farmer, they are often also fodder producers too.
The increasing incidence of climate variability such as drought drives domestic demand for fodder, with many farmers planning ahead with production, so they can rely on fodder stocks and build capacity to buy in additional fodder if needed.
According to ABARES, almost 1.2 million tonnes of hay was exported from Australia in 2020, with exports valued at $584 million in 2019-2020. This represents considerable growth in the industry since 2006-07 for example, when exports were valued at $242 million.
What is fodder?
Fodder is used to feed domesticated livestock. The Food and Agriculture Organisation (FAO) defines fodder crops as those crops that are cultivated primarily for animal feed. By extension, natural grasslands and pastures are included whether they are cultivated or not.
Fodder crops may be classified as either permanent or temporary crops. Permanent fodder crops relate to land used permanently (for five years or more) for herbaceous forage crops and includes grazing lands throughout Australia. Temporary crops are those that are grown intensively with multiple cuttings per year. They can be broken into three groups:
- grasses, including cereals that are harvested green
- legumes, including pulses that are harvested green
- and root crops that are cultivated for fodder
These crops are fed to animals, either as green feed, as hay, that is crops harvested dry or dried after harvesting, or as silage products.
The main fodder products are hay and silage. Most hay and silage is used on the farm on which it was produced, however there is significant trading of hay, and some trading of silage and crops for silage production, particularly in the beef feedlot sector and the dairy industry according to New South Wales Department of Primary Industries.
Hay can be classified into four general types: legumes, grass, cereal and mixed.
- Legume hay – eg lucerne, vetch
- Grass hay –eg Bermuda grass
- Cereal/Grain hay – oaten, wheaten
- Mixed – forage hay oats, wheat, barley
- Straw – bedding and can be mixed with lucerne hay, molasses or grain to help it go further.
More about hay
Hay is the most common method of fodder conservation. Most crops and pastures can be made into hay of varying quality.
Hay making involves wilting cut pasture to a moisture or dry matter level where it is dry enough not to ferment but wet enough not to shatter when baled. This is usually at about 12% moisture.
If hay is baled with too much moisture it can ferment leading to heat generation, feed quality decline and a potential fire risk.
What is silage?
Silage is made by ensiling or fermenting pastures. It generally produces better quality feed than hay. This is due to the reduced interval when making silage between cutting and conserving the feed – the longer the time, the more the feed nutrients degrade.
Pasture should be cut for silage when at its most vegetative stage with no more than 20% of the pasture showing seed heads. This is then wilted to about 30% dry matter before being chopped and ensiled in an airtight environment. Early cut silage will have higher quality, but less quantity according to Meat & Livestock Australia.
Silage production and storage is reliant on an air-free environment to promote fermentation processes and inhibit undesirable processes and decay. It is critical that this air-free environment is made for the whole lifecycle of the silage – from when it is made until it is completely utilised.
According to Successful Silage, a publication by Dairy Australia and the NSW Department of Primary Industries, factors driving the increased adoption of silage include:
- A need to improve pasture utilisation and increase productivity.
- Capacity to cut earlier in the season, produce a higher-quality product and spread the harvesting time over a longer period than with hay.
- Improved silage-making technology that make the process more reliable.
- The suitability for long-term storage for a drought or floods.
Crop, hay or silage feed?
The choice of fodder, crop, hay or silage by livestock producers is determined by factors such as production targets for growth or weight gain, and/or to make up seasonal gaps between feed demand and supply during periods of drought for example. On farm, the choice of fodder crop may also be considered in the context of fixing nitrogen in the soil, maintaining ground cover and preventing erosion.
Other factors producers will consider in choosing the best fodder for their farm and feed needs include:
- the feed quantity and quality requirements of on-farm stock if any
- market supply and demand if they are trading the end-product
- rotation needs ie nitrogen fixing
- weather conditions, eg water availability
- soil type
- pest and disease pressures
- weed management
- sowing time
Research has also been undertaken in relation to the conservation and sustainability benefits of hay production. For example, researchers from WA’s Department of Primary Industries and Regional Development, Agriculture and Food, outline the numerous benefits of hay production, including that it fits into most of the accepted cropping rotations, helps reduce weed seed banks, overcomes herbicide resistance because it provides a break from traditional chemical regimes, and gives growers an alternative cash crop.
Specifically, they note:
- Oats are more competitive with weeds than barley, wheat, canola and pulses.
- Oats are much more tolerant than other cereals to frost events that occur during vegetative growth and flowering, so growing oaten hay on frost-prone paddocks minimises the frost risk as it is cut soon after flowering, avoiding the frost-sensitive period.
- As oats rejuvenate well, they can be grazed before they are cut for hay or harvested for grain.
- Cutting oats for hay effectively reduces the risk of Annual Ryegrass Toxicity (ARGT) as ryegrass plants (and other hosts) are removed from the paddock before they become toxic.
- Oats have a greater tolerance to waterlogging than other cereals.
Who uses fodder in Australia?
Fodder is used to feed domesticated livestock such cattle, sheep, pigs, horses, chickens and rabbits.
According to a 2020 report published by AgriFutures Australia, hay for Australia’s domestic market is produced in the southern region of Australia largely for the dairy and beef industries.
The latest figures from Dairy Australia have the national dairy cattle herd numbering around two million head, including calves across 5055 registered dairy farms. Pasture, hay, silage, grains and forage crops such as lucerne, turnips and oats making up their diet.
The 2020 Dairy Australia National Dairy Farmer Survey showed that nearly all dairy farmers engaged in some level of supplementary feeding – incorporating grains, hay and silage into their feed ration – with the national average around 1.7 tonnes per cow per year in 2019/20.
Sheep and beef cattle farms and feedlots are also significant users of fodder. According to MLA, the feedlot sector grew 54 per cent over the five year period to 2018-19, due to producers increasingly utilising feedlots as a means for drought mitigation and increased demand for grainfed beef in export markets. For example, in 2019–20, three million grainfed cattle were marketed (feedlot turnoff).
Breeding and agronomy
There are a number of organisations involved in breeding and agronomy research for fodder production in Australia, including those listed below:
Announced in 2021, this project will enable the transition of oat breeding from a public model to a commercial platform. The subsequent commercial breeding program conducted by InterGrain will develop varieties combining high yield (dry matter production), improved hay quality and robust agronomics aligned with relevant industry stakeholders.
These improved varieties developed by InterGrain will be suitable from commercial application across WA, SA, Vic and NSW markets. Further, InterGrain will increase the rate of genetic gain in future breeding and selection activities by targeting key elements of the breeder’s equation and application of methodologies that enable increased scale of breeding operations and selection accuracy.
The project is a four-year investment by AgriFutures and the Department of Primary Industries and Regional Development (DPIRD), South Australian Research and Development Institute (SARDI), Agriculture Victoria, New South Wales Department of Primary Industries (NSW DPI) and Grower Groups.
Currently gaps exist in Australian export fodder agronomic and pathology knowledge (including hay variety responses to nutrition and plant density, effect of time of sowing on hay quality, impact of diseases on hay quality and yield, optimum timing of disease management intervention and the impact on return ($/ha) of these to name a few). The project will provide growers with variety selection and nutrition advice. It will provide updated disease management guidelines for oaten hay crops based. It will assess the role of Plant Growth Regulators (PGRs) as a tool to manage lodging in high yielding environments.
This project will review and monitor market requirements for chemical residues, and will involve regular monitoring of market regulations and specifically maximum residue limits (MRLs) for all chemicals of consequence to the export fodder sector as well as heavy metals and mycotoxins. This will be achieved by reviewing the various advice notices provided by markets and through monitoring the regulations as listed on their websites.
Upon review of the changes and the impact on existing or potential markets, advice will be provided to exporters. Following feedback from exporters, as required, consultation will occur with the Australian Government on the impacts on supply to those markets and the possibility and content of a government to government submission to alter the proposed MRLs. The outcome of those deliberations will be provided to the export fodder sector.
Exporting Australian fodder
Export fodder includes a wide range of crop and pasture species that are grown, harvested and lightly processed for both on-farm use and export. Export fodder production includes hay and silage of all types (pasture, cereal, lucerne, clover and others), chaff (coarsely chopped dried whole plants), vetch and pelletised feed. The dominant hay exported from Australia is oaten hay.
According to a 2020 report published by AgriFutures Australia export hay producers are distributed throughout the southern region of Australia, and current exports of oat hay are close to one million tonnes, with an expected market growth to 1.8 million tonnes in the next few years.
Currently, South Australia (SA) and Western Australia (WA) produce the majority of export hay. According to AgriFutures Australia, meeting demand for export hay will require higher hay yield and hay quality, but also will allow growers in non-traditional oat growing regions an opportunity to produce hay for the export market.
For more than 25 years, the Australian export fodder industry has supplied forage to countries around the world. Key export markets include Japan, China, Korea and Taiwan.
The USA is the world’s leading exporter of hay, largely dominated by lucerne hay.
Source: Hay & Forage Grower 2023
Based on data provided by the USDA’s Foreign Agricultural Service (FAS), hay exports in 2022 totalled 4.04 million metric tons (MT), which was 4.6% below 2021’s record-high level of 4.24 MT. For the fourth consecutive year and the fifth time in the past six years, total U.S. hay exports in 2022 exceeded 4 million MT. The decline in total hay exports was solely attributed to a significant reduction in grass hay exports, with an unfavourable exchange rate also having an impact.
The top five export markets for the USA’s alfalfa (lucerne) exports in 2019 were China, Japan, Saudi Arabia, United South Korea and Taiwan. In relation to hay other than lucerne, the USDA-FAS reported 1.2 million MT was exported in 2022, with the key markets being Japan, South Korea, Taiwan, Canada and UAE.
The third largest fodder exporter, behind the USA and Australia is Spain. The domestic dairy herd of Spain is the primary consumer of Spain’s dried fodder, along with other ruminants like sheep and goats. Spain’s export markets include the United Arab Emirates and China.
RD & E plan
The Research, Development & Extension priorities for Australia’s Export Fodder industry are developed by AgriFutures Australia in consultation with the Export Fodder Advisory Panel.
The industry has focused strongly on addressing market requirements, establishing new markets and developing a high-quality product.
This program benefits not only the exporters, but the domestic fodder industry as well. The industry’s RD&E objectives for 2016-2021 included the Oaten Hay Breeding program, hay agronomy, chemical usage integrity, animal nutrition research, biosecurity research and work health and safety.
The RD&E program is funded by the Export Fodder R&D Levy, which was established in 2016, of $0.50/tonne on all exported fodder paid by industry participants which is matched by the Australian Government at up to 0.5% of industry GVP.
In April 2021, Agrifutures Australia announced a major new direction for the National Oat Breeding Program. Backed by a joint $5.4 million investment from AgriFutures Australia and the Grains Research and Development Corporation (GRDC) over five years, the program will now be led by will be commercial breeding company, InterGrain.
The $11.5 million commercial breeding Program will provide new varieties for milling and hay oats, side-by-side, with a broad genetic base equipped to respond to the changing needs of Australian growers and exporters.
This Program is the only one of its type in the world and builds on research in hay and milling oat breeding by the South Australian Research and Development Institute (SARDI). Seventeen oat varieties, including eight hay varieties resulted from SARDI’s breeding and development research over the past 20 years, and these new oat varieties represent more than 80 per cent of the export hay produced, and nine milling varieties representing
Who exports hay in Australia?
The Australian Exporters Company (AEXCO) shareholders are the major export oaten hay processors of Australia, and are listed below:
Sources and resources
- Agricultural Commodities
- Australian Bureau of Statistics
- Australian Feed Grain Supply and Demand Report – Feed Grain Partnership, JCS Solutions, 2018
- Chemical Residue Monitoring for the Fodder Industry – AgriFutures Australia, 2019
- Fodder Conservation – Meat & Livestock Australia, 2020
- Growing oaten hay on frost-prone paddocks – Western Australia Department of Primary Industries and Regional Development, Agriculture and Food, 2017
- Growing oats in Western Australia for hay and grain – Western Australia Department of Primary Industries and Regional Development, Agriculture and Food, 2011
- National Oaten Hay Breeding Program – AgriFutures Australia, 2021
- National Hay Agronomy project – AgriFutures Australia, 2018
- Oats: weeds and integrated weed management – Western Australia Department of Primary Industries and Regional Development, Agriculture and Food, 2017
- Silage in the Top End – AgNote, Northern Territory Department of Primary Industries, Fisheries and Mines, 2003
- State of the Industry Report 2020: The Australian red meat and livestock industry
Meat & Livestock Australia, 2020
- Successful Silage – Dairy Australia and NSW Department of Primary Industries, 2004
- Why grow oat hay? AEXCO, 2016