READ FULL REPORT HERE.
Driving Prices Up
- Recent high impact rainfall events and flooding has significantly reduced expected Spring hay production.
- Rainfall has disrupted most hay and fodder production plans across the eastern states with widespread reports of crop losses or crops which will no longer be suitable for high quality hay production.
- A reduction in fodder production had been forecast prior to the weather events due reduced hay crop plantings due to the continual rise in input costs and the lower return from hay production. In expectation of potential shortages some buyers had put in place contracts for Spring hay, these contracts will be given priority, reducing the amount of hay available for open sale.
- With supplies tight and quality not yet fully assessed due to harvest delays a growing number of producers have indicated they will hard pressed to harvest and process hay for existing customers with long-term, reasonable price, contracts.
- The seasonal conditions will lead to high protein hay shortages.
- Rising fuel costs will be factored into hay and sileage deliveries.
- Labour shortages, road closures and significant road damage is impacting timeliness of deliveries both onto and off farms. Some hay producers have not been able to continue their hay production activities as diesel cannot be delivered to farm due to road damage.
Driving Prices Down
- The potential for considerable spring pasture growth is predicted to reduce the need for hay, providing paddocks do not remain water logged for too long and are accessible to stock.
- Expectations the forecast wet Spring will support continuation of in pasture and in paddock feed options is giving some farmers confidence stock can be maintained without need for hay.
- The Bureau of Meteorology (The Bureau) predict a continuation of La Niña. The negative Indian Ocean Dipole (IOD) persists. The cloud and rainfall patterns currently responsible for the above average rainfall events across New South Wales, Tasmania and Victoria are continuing.
- With moisture profiles already at saturation point, continued rainfall events have led to many flooding events across eastern Australia. The flooding is damaging crops and causing significant disruptions to harvest and hay production programs
- Delivery costs will increase as they will be impacted from labour shortages, the price of fuel and by flooding and the wide spread, considerable amounts of road damage from rainfall and flooding events.
- As the widespread damage to crops has become evident prices are beginning to rise across most areas. Exporters and the domestic market appear to still be waiting for clear assessment of the potential supply. There is an expectation that prices will significantly rise once regional supply shortages have been accurately assessed.
- Purchasers of hay with long term relationships and a willingness to recognise the need to pay a price that supports hay producers with a reasonable rate of return are likely to be given first preference over any new season’s hay able to be produced.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.