Fresh hay hits market but demand still high

Australian Fodder Industry Association chief executive officer John McKew said the supply of hay had improved in recent weeks, with the hay season under way.

"We are in a reasonably good situation, right in the middle of the hay season, but it has been a mixed bag of results across the country," he said.

"New season hay is hitting the market so we have short-to medium-term supply, which also gives a bit of price relief."

But he warned hay prices were not lowering significantly, which was an indication supply remained tight.

Mr McKew said certain areas of Australia, such as the South East and South West Vic, had quite good hay seasons, and were expecting "average to better yields", once the weather allowed cutting to continue.

"They should produce good quality crops and yields," he said.

"But there is still the drought in Qld and NSW, and Vic's Gippsland, so the fodder supply situation is going to come under pressure.

"If you're in the market for fodder, I would not be leaving the decision to purchase too late."

He said hay in central SA and the SE was already heading interstate, some bought "off the baler".

RELATED: State's hay supplies run low

Mr McKew said the hay supplies had been bolstered by many frost-damaged crops across Australia.

He said there was also a number of farmers that did not receive the finish on their crops they wanted and elected to cut for hay.

"You can't buy a new or second-hand baler for love or money at the moment," he said.

"People don't want to get caught short again."

While in recent years, WA had played a big part in buoying the national supply, Mr McKew said the west had also suffered from a dry season.

"They will have an average, at best, fodder season, and will likely just meet their own needs," he said.

Livestock SA and SA Dairyfarmers' Association chief executive Andrew Curtis said the SE harvest seemed to have been "better than expected", while significant hay had also been cut in the cereal regions.

He said most farmers in need of hay seemed to be making plans earlier.

"Lots of people are stocking up at the moment," he said.

"Once this lot goes, there will be no more (until next season)."

Since November 15, lucerne hay in the SE has dropped $150 a tonne, and is selling between $350-$500/t.

Cereal hay prices have also come back slightly from $240-$270/t in mid-October to $230-$260/t, while straw prices remained steady at $150-$200/t.

In central SA, cereal hay has gone from $400-$450/t in early October to $200-$260/t, while lucerne remained steady at $570-$650/t and straw at $140-$170/t.

In November last year, cereal hay in the SE was $300-$400/t, lucerne $500-$600/t and straw $160-$180/t.

In the central region, cereal hay was $300-$400/t, lucerne $430-$500/t and straw $120-$150/t.

RELATED: WA unable to supply for SA producers

Freeling haymaker Corbin Schuster, Schuster Farms, said this year's hay season was running about one month earlier than usual, with many sowing early, and low rainfall meaning the "maturity of crops leapt ahead".

"Considering how little rain we had, the crop yields are incredible," he said.

Schuster Farms caters mainly for the high-quality horse feed market and said so far, SA demand was steady, but there was increased interstate demand, particularly in bushfire-affected areas near Sydney.

"We've been fielding (inquiry) calls recently, far more even than during the past couple of years," he said.

"The drought had already amplified demand but the bushfires have (lifted it further)."

He said despite the higher freight costs to get hay from the Freeling area, compared with those to transport hay from Vic or the SE, many producers in NSW were looking to find "all types of hay", particularly those suitable for horses.

"People who've got racehorses are willing to pay whatever it takes to get it," he said.

Mr Schuster said there had been increased areas sown to hay this year in his region, which was boosted by frosted crops, which would be more suited to the sheep and cattle markets, but demand would be high, particularly for premium quality.

"Even with the increase in baler sales, there hasn't been a similar lift in sheds being built," he said.

Nitschke Chaff and Freight's Matt Nitschke, Greenock, said he had been carting six to eight B-double loads of hay and chaff a week to eastern states, with demand increasing across the past 1.5 to two years.

"I'm getting new inquiries for chaff nearly every second day from NSW and Qld, and then it leads to 'and can you get hay?'," he said.

He said there was a particular spike near April this year, but was rising again.

"Hay is pretty quickly getting scooped up," he said.

He said this demand was coming from retail stores, searching for stock to sell on to their local customers.

Mr Nitschke said a benefit of their freight business was they were able to pick up loads in Brisbane and Sydney to return to SA, and reduce some of the costs for their customers.

He said another element pushing hay prices up, particularly for lucerne hay, was the rising cost of water.