HAY prices are strong again this year with a combination of high livestock prices and another failed spring in the Upper South East meaning rates are expected to rise until the autumn break in 2016.
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According to Dairy Australia’s latest Hay and Grain Report cereal hay is trading at $200 to $250 a tonne, and lucerne hay at $280-$340/t.
Rate rises will depend on whether it is an early or late break, with many areas bracing for a long period of supplementary feeding.
PIRSA estimates 33,000t were destroyed in the Pinery fire worth $8 million – mostly export oaten hay – there has also been a number of spontaneous combustion fires across the state, depleting supplies.
But PIRSA grains account manager Dave Lewis says these losses are only a very small percentage of the state’s total estimated 1mt produced.
This is more than the five-year average of 800,000t.
“In areas having a tough season we may see some localised shortages but while they may face higher freight costs it should just be a matter of redistributing what we do have,” he said.
Lucerne Australia chair Guy Cunningham is confident with feed barley trading at more than $200/t and likely to rise further, hay demand will be strong this season.
“There is a quid in feedlotting and a quid in looking after your animals so there has to be money in it,” Mr Cunningham said.
Livestock producers who had experienced a run of dry seasons were well organised with their hay purchases ensuring no panic buying.
“There is a fair bit less hay about but prices have not done anything silly.”
“Prices will lift from here especially into autumn but there is a ceiling on what people are willing to pay.”
He estimates only two thirds of the usual volumes of lucerne hay have been produced in the Upper South East with hardly a dryland paddock cut.
Irrigated tonnages are also well down with growers bringing forward their seed shut up dates to avoid a repeat of damage from lucerne seed wasp which impacted on the 2014-15 harvest.
Ryan Smart from the Smart Group sees hay as a good option for their Keith property, Akeringa, increasing their hay area from 200-1000 hectares in the past year.
“We know the land can produce the biomass and the way the seasons are going we may not always get the crops through to grain.”
“The potential yield of our cereals this year was only 2.5 to 3t/ha but we knew we could grow a 6t/ha plus of biomass so the gross margin for hay is better.”
Mr Smart says there are plenty of positive demand signals with export forward contracts and the strength of livestock prices.
