Good quality cereal hay is now in high demand but there is short supply in a number of areas. Farmers looking to purchase and store fodder against expected winter demand may find long-term customers are given first options by hay and fodder producers as supplies tighten.
There has been the expected drop in temperatures as winter has begun. The cold front responsible for rainfall events has moved across the country contributing to need for stock to be supported with supplementary fodder.
Pasture growth will be inhibited by cooler soil temperatures leading to further expected increase in demand for hay.
Current high forward contract prices due to strong international market demand has encouraged grain growers to plant additional grain crops instead of investing in hay production. Opportunistic hay production is not seen as a price competitive cropping option, a smaller number of hectares has been sown this season.
Hay growers are tending to preference existing customers over new ones given the shortage of higher quality hay. Hay sheds are less than half full but most is already committed.
Input costs continue to impact cropping decisions as grain and fodder producers undertake sowing and for most producers’ pasture hay will not be a priority for fertiliser application. This may reduce quantities of pasture hay produced and available during late winter/early spring.
Driving Prices Down
Expectations for a wetter than average spring will maintain confidence. Farmers may consider pasture growth will support stock without need for supplementary feed.
Varied qualities of fodder are available on the market. Growers with lower grade hay, particularly hay stacked outside have been actively trading to reduce the amount stored on farm and prepare space for the new seasons harvest.
The quality of late season hay was impacted by continuing rain events across most states. Rainfall has meant many crops were harvested later than usual, resulting in coarser hay of lower quality.
The majority of grain and hay production areas across Australia have completed sowing. Dry sowing had commenced in April in some regions with reliance on subsoil moisture. Some area have been hampered by ongoing rainfall events and saturated soils which means paddocks cannot be accessed.
Most cropping areas have received reasonable and in many cases consistent falls of rain, improving confidence in the 2022/23 cropping season.
The Bureau of Meteorology has announced the end of the La Nina, but have suggested there is a 50% chance it may reform later in the year, bringing wet conditions for late winter and into Spring.
High input costs and availability of labour remain of general concern. The lack of available labour may impact hay production in the coming season and will restrict hay movement over winter.
Buyers are encouraged to feed test and view fodder before purchasing to be sure of the quality of the feed.