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Driving Prices Up
- Scarcity of good quality older hay of many varieties continues to be reported, and there are strengthening forecasts for reduced hay production in the upcoming season.
- Growers shall consider the continual rise in input costs when considering whether they will invest in hay production in the coming season. In some cases, producers have indicated they are only going to be harvesting hay for existing customers with long-term contracts.
- Growers are responding to the production costs and adverse conditions late in the season and are changing their production choices. A large number of vetch crops will be ploughed in for use as a valuable nitrogen source, leading to high protein hay shortages.
- Fuel costs will be factored into deliveries for premium to small or short-term deliveries.
- Demand continues from livestock and feedlots for hay and straw to add bulk and support stock manage the high moisture content green feed in some regions.
- Farmers, especially dairy farmers, are actively securing supplies of high protein hay due to the prediction for lower production and lower quality by the end of the year.
Driving Prices Down
- Good spring pasture growth continues across many areas. This has seen a sustained reduction in the late winter demand for supplemental feeding in some areas.
- Lower quality hay stored outside came on to the market to fill in the gaps created by the scarcity of high-quality supplies. This hay was in many cases traded at a lower price point.
- The Bureau of Meteorology’s (BOM’s) ENSO Outlook shows an established La Niña. Tropical Pacific sea surface temperatures have been cooling since June and are now at La Niña thresholds. The models indicate this La Niña event may peak during the spring and return to neutral conditions early in 2023.
- With moisture profiles already at saturation point and the bureau’s outlook for a wet spring/summer firming theelevated flood risk remains for eastern Australia. Some areas again under flood watch and concerns about the coming days.
- Rain continues to fall on hay growing areas of the east coast. The rain falls are consistent each week without the needed extended periods of sunshine to enable curing and baling. There are concerns this is already reducing the quality product for the new season.
- Reports of smaller hay and fodder plantings earlier in the year as growers chose to take advantage of predicted global grain and oilseed prices to offset higher input costs supports forecasts there will be a shortage of high-quality spring hay and silage this season.
- There are concerns about the integrity of news reports that Bali is reporting no cases of Foot and Mouth Disease in the lead up to the G20 meeting in Indonesia. Growers would be very concerned about the reduction of any measures to prevent the disease reaching Australia.
- With the fuel excise being reimposed this week, the costs of diesel will rise adding to the already high production and delivery costs for fodder.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.