BALCO chief executive officer Rob Lawson is urging any farmers with hay supplies still on-hand to take advantage of the outstanding prices on offer.
Top quality oaten hay is making $250 a tonne, putting it on a par with bread wheat returns.
“Prices are so good that even hay that has serious rain damage is making $160/t,” Mr Lawson said.
“The average price for undamaged oaten hay is between $200 to $250/t.
“These are some of the highest prices we’ve seen in recent years.
“Quality hay is up about $20/t on last year, but the lower grades are $40/t up.”
Mr Lawson said hay offered some of the best gross margin crops for the 2015 season, up there with durum and lentils.
“The strong hay prices are mainly on the back of export demand,” he said.
“Our traditional destinations are still going really well – Japan, Korea and Taiwan.
“We’re also seeing great growth in demand in China.”
New markets such as Indonesia and Vietnam were also showing increasing demand.
“The expectation is the international market will continue to provide better returns than the domestic market for hay,” Mr Lawson said.
“This is the time to open shed doors and get any excess hay onto the export market.”
Balco has contracted to export 165,000t of hay this year – up from 150,000t in 2015.
“Asian dairyfarmers are eager to secure Australian hay as they look to boost their productivity, but the market demand is outstripping supply,” Mr Lawson said.
With the 2016 cropping season set to get underway in the next couple of months, Mr Lawson expects to see increased area of hay crops in SA paddocks this year.
“Going forward, I expect prices will remain strong,” Mr Lawson said.
“Like all agricultural products, price is driven by supply and demand, and demand is expected to stay strong.”
There were other benefits of looking at hay for a cropping rotation option.
“To a certain degree, hay can handle dry finishes and frost events,” Mr Lawson said.
“A lot of farmers are saying they’re putting a percentage of their farm to hay as a risk management tool.
“Years ago hay was looked at as a crop with added risk, because of the risk of rain events and damage.
“But even if you had rain damaged hay this year, at $160/t, if you had a 6t a hectare crop, that still equals about a $1000/ha return.”
Balco procurement manager Pat Guerin said the time was right for growers to release any stored hay for export. “We’re keen to hear from farmers across SA as soon as possible,” he said.
