READ THE FULL REPORT HERE
Driving Prices Up
- Good quality hay is in growing demand as supplies have tightened and pasture growth is yet to receive the warmth required to boost growth.
- Growers who had been donating into the flood and disaster impacted areas have significantly reduced the amount of hay they donate due to rising input costs and the need to make a return.
- Input costs continue to impact cropping decisions. This has reduced the quantities of pasture hay produced during late winter and will continue to impact supplies in early Spring.
- Opportunistic hay production has not been seen as a price competitive cropping option. Supply of Spring hay in many areas will be therefore lower than expected.
- Fodder users who are concerned about the potential of reduced supply are looking to lock in Spring supply contracts. In a number of regions hay/fodder producers have little hay on the open market for sale to new customers, most has been contracted for sale to long-term buyers.
- Slow but steady increase in enquires to source feed and increase on hand supplies of high-quality hay. Supplies of high-quality cereal hay are now very low in most regions.
Driving Prices Down
- Confidence in Spring pasture growth continues due to predictions for a wet Spring. Some expect stock will not need supplementary feed, this has kept demand for hay and fodder steady.
- Growers with lower grade hay from past seasons, particularly hay stacked outside, were actively trading to clear the way for their new seasons hay.
- The slow build-up of enquiries in addition to the lack of open market sales may be suppressing market transparency. This is leading to a false sense of security about future available stocks and prices for new seasons hay.
- Prices are remaining steady in most regions due to lack of open trade. Most hay, being currently sold, was contracted for purchase earlier in the year, so prices do not reflect current costs of production nor the predicted reduction in hay production this Spring.
- The Bureau of Meteorology (BOM) 3-month climate outlook is for above average rainfall for the eastern two-thirds of Australia. With wet soils, high rivers and full dams, and the spring outlook for above average rainfall, elevated flood risk remains for eastern Australia.
- The Bureau’s ENSO Outlook continues at La Niña ALERT, indicating at least a 70% chance of La Niña reforming later this year. This is around triple the normal likelihood. La Niña events increase the chances of above-average rainfall for northern and eastern Australia during Spring and Summer.
- The range of biosecurity incidents which may impact Australian agriculture are causing significant concern. Reports of Foot and Mouth Disease in Bali, the incursion of varroa destructor mite and other pest incursions such as slugs are being raised as concerns by many farmers contacted for the hay report. Biosecurity management and control costs are rising.
- There is concern the high price of inputs, lack of availability of farm labour and likelihood of continuing higher than average rainfall in some regions is not being factored into fodder prices.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.