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Driving Prices Up
- Demand is continuing to be driven by the ongoing dry conditions in Southern Queensland and large parts of NSW. Even with some hay being cut in the regions local supply cannot meet that demand.
- Transport costs continue to affect the final costs of fodder given the distances that the fodder needs to travel as well as the high cost of diesel being passed on to the end users.
- Low saleyard prices continue to keep larger herds either on farm or in feedlots which is leading to higher fodder requirements and a continuing tightening of supply.
Driving Prices Down
- Local green feed availability is keeping demand, and therefore prices, stable in select areas of the country.
- Livestock producers who cannot move stock to areas with better green feed availability are now looking at maintenance feeding, reducing demand.
- Hay season is a few weeks away in parts of the country and some end users are holding off on purchases in the expectation that higher supply will reduce the cost of fodder.
- Older hay supplies continue to be made available to the market as producers clear some space in preparation for the next season. This hay is of variable quality and is reducing the price point in selected regions.
- Trade in hay is continuing to move, but quite a bit of this is either older stock moving out of sheds, or some small amounts of newly cut hay. This hay is headed north from the southern states to meet demand in those drier areas of the country. Any fodder being cut in those drier areas is being sold and transported very quickly to meet local demand. Some across state hay supplies are moving into the eastern parts of Gippsland where it has become unseasonably dry.
- The Bureau’s El Niño Alert continues, with El Niño development likely during spring. Sea surface temperatures in the tropical Pacific are exceeding El Niño thresholds and have continued to warm slightly over the last fortnight. The Indian Ocean Dipole index has had its fourth week above the positive IOD threshold with the recent high values indicating an event is very likely. A positive IOD typically decreases spring rainfall for central and south-east Australia and can increase the drying influence of El Niño. The Southern Annular Mode index is currently negative and is expected to remain negative over the coming week, before returning to neutral late in September. During spring, a negative SAM is associated with decreased rainfall across parts of eastern NSW and eastern Victoria but increased rainfall over western Tasmania.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.