Good quality hay will be in demand as we approach Spring.
There has been a significant drop in temperatures reducing the rate of pasture and grazing crop growth. This has supported an increase in the demand for hay and silage.
Stocks of hay in many areas which had been providing donations into flood affected areas are now low. Growers who had been donating into the area are now concerned about managing the rising input and production costs and have significantly reduced the amount of hay they donate.
Input costs continue to impact cropping decisions. Many grain and fodder producers will not prioritise fertiliser application for pasture hay. This is expected to reduce quantities of pasture hay produced during late winter/early spring.
Opportunistic hay production has not been seen as a price competitive cropping option.
Fodder users who are concerned about the potential of reduced supply are looking to lock in Spring hay supply contracts.
Slow but steady increase in inquires to source feed and increase on hand supplies of high quality hay. Supplies of high-quality cereal hay are now very low in most regions.
In a number of regions hay and fodder producers have little hay now available for open market sale or sale to new customers, most has been contracted for sale to long-term buyers.
DRIVING PRICES DOWN
Confidence pasture growth will support stock without need for supplementary feed has kept demand for hay and fodder steady.
Growers with lower grade hay from past seasons, particularly hay stacked outside, are actively trading to clear the way for their new seasons hay.
The slow build-up of enquiries, and a lack of awareness regarding the impact international grain prices have had on crop choices may be leading to a false sense of security about future available stocks and prices for new seasons hay.
Prices are remaining steady in most regions due to lack of open trade. Most hay, being currently sold was contracted for purchase earlier in the year, so prices do not reflect current costs of production.
The Bureau of Meteorology (BOM) continue to predict the high likelihood of a negative IOD event for the coming months. A negative IOD along with warmer than average sea surface temperatures increase the chances of above average winter–spring rainfall for much of Australia.
BOM have reported the impacts of a strong cold front across most of eastern Australia bringing reasonable to heavy rainfalls across most Australian cropping regions. Particularly heavy falls across parts of WA and Tasmania.
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.
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.