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Driving Prices Up
- Good quality hay is in growing demand as supplies have tightened and the forecast for a wet Spring raises some concerns about potential pressure on new seasons hay production.
- Growers will be looking to preference supply to those customers who recognise rising input costs and the need for hay producers 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 pasture hay production in Spring.
- Livestock producers are looking for straw and hay to provide bulk to help stock cope with the lush new seasons pastures.
- Fodder users are looking to lock in Spring supply contracts. In many 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.
- High-quality cereal hay is no longer available for purchase on the open market in most regions.
Driving Prices Down
- Confidence in the potential for Spring pasture growth continues due to the forecast for a wet Spring. Some expect stock will not need ongoing supplementary feed.
- Growers with lower grade hay from past seasons, particularly hay stacked outside, were actively trading to clear the way for their new seasons hay which kept the price range wide in some regions and impacted average prices.
- 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 starting to reflect increased enquiries to lock in Spring hay contracts. 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’s ENSO Outlook continues firmly predict La Niña, 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.
- With already wet soils, high rivers and full dams, the spring outlook for above average rainfall is predicting an elevated flood risk remains for eastern Australia.
- There are concerns in many regions that Spring hay production may be hampered by wet weather and a lack of clear days for curing and safe baling.
- 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.