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Driving Prices Down
- Recent high impact rainfall events and flooding has significantly reduced expected Spring hay production. Rainfall has impacted broadly across most hay and fodder production areas of the eastern states with widespread reports of crop losses or crops which will no longer be suitable for high quality hay production.
- Many vetch crops, which had to be cut for hay prior to going in to pod, have been impacted by rain and weather and are unsuitable for baling. Most are now only suitable for in paddock mulch.
- The loss of vetch hay crops combined with the expected reduction in quality and quantity of other high protein hay options, will lead to high protein hay shortages.
- Growers had reduced hay crop plantings due to the continual rise in input costs and the lower return from hay production.
- With supplies tight 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.
- Rising fuel costs will be factored into hay and sileage deliveries.
- Labour shortages and road damage will also impact timeliness of deliveries.
Driving Prices Up
- The potential for considerable spring pasture growth is predicted to reduce the need for hay, providing paddocks do not remain water logged for too long and are accessible to stock.
- Expectations the forecast wet Spring will support continuation of in pasture and in paddock feed options is giving some farmers confidence stock can be maintained without need for hay.
- There have not yet been any firm indications of the expected international market demand.
- The Bureau of Meteorology predicts a continuation of the La Niña event currently responsible for the substantial rainfall events across New South Wales, Tasmania and Victoria.
- With moisture profiles already at saturation point, continued rainfall events have led to many flooding events across eastern Australia.
- In addition to total crop losses there are concerns about quality of what new seasons hay and silage will be able to be harvested. Assessment of the impact of water logging and the flooding of paddocks will only commence once paddocks are accessible.
- Delivery costs will increase as they will be impacted from labour shortages, the price of fuel and by flooding and road damage from rainfall and flooding events.
- As the widespread damage to crops has become evident prices are beginning to rise across most areas. Exporters and the domestic market appear to still be waiting for clear assessment of the potential supply. There is an expectation that prices will significantly rise once regional supply shortages have been accurately assessed.
- Purchasers of hay with long term relationships and a willingness to recognise the need to pay a price that allows hay producers a reasonable rate of return are likely to be given first preference over any new season’s hay able to be produced.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.