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DRIVING PRICES UP
- Recent high impact rainfall events and flooding has significantly reduced expected Spring hay production and is causing concerns due to the delayed start to summer crop 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.
- 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. They are expecting to have little if any sale available for new customers or general sales.
- The seasonal conditions will lead to a reduction in the quality of in paddock dry feed which will put further pressure on demand for hay and silage.
- Some hay producers have not been able to continue their hay production activities as diesel cannot be delivered to farm due to road damage and flooding. Rising fuel costs will also be factored into hay and sileage deliveries.
- Labour shortages, road closures and significant road damage is continuing to impact timeliness of deliveries both onto and off farms.
DRIVING PRICES DOWN
- The potential for considerable pasture growth in areas where high temperatures will not impact growth rates is predicted to reduce the need for hay, providing paddocks do not remain water logged for too long and can be made accessible to stock.
- There have not yet been strong price movements from the export feed industry which may be delaying the setting of some base level domestic prices.
- The Bureau of Meteorology predicts 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 and unseasonable cold temperatures across New South Wales 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 infrastructure. The rain events and flooding are causing significant disruptions to grain harvest and hay production.
- Delivery costs will increase as they will be impacted from labour shortages, the price of fuel and by flooding and the wide spread, considerable road damage from rainfall and flooding events.
- As the widespread damage to crops has become evident prices are beginning to rise across most areas. There is an expectation that prices will significantly rise once regional supply shortages have been accurately assessed.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.