Hay shortage concerns ease

Hay shortage concerns ease

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Hay supplies are expected to be sufficient for the winter period, thanks to good rain in key areas. Photo: SHUTTERSTOCK

Hay supplies are expected to be sufficient for the winter period, thanks to good rain in key areas. Photo: SHUTTERSTOCK

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Fears of a potential winter hay shortage have eased, with a good autumn break in key areas easing demand.

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Fears of a potential winter hay shortage have eased, with a good autumn break in key areas easing demand.

Australian Fodder Industry Association chief executive officer John McKew said the widespread and substantial break was enough to have an almost immediate impact on demand.

"I was getting a little bit concerned, if we didn't get a break, how long supply would last," he said.

"Luckily, the rain has come.

"Our product in April and May is very reactionary to rainfall, so demand stopped very, very quickly, as the rain started to fall, and took the pressure off buying fodder at high prices."

Mr McKew said farmers were holding off buying too much hay, at the moment.

"I wouldn't say we are in an oversupply situation, but there is sufficient supply in the system to sustain us, through the winter months," he said.

Mr McKew said there were plenty of options for primary producers looking for hay for bulking out feed or to providing additional fibre.

He added a cautionary note, advising farmers to take care with regards to quality.

"It's always a good idea, if you can, to take feed tests, to make sure what you are buying is what you need for your enterprise," he said.

"If we don't get too much of a wet winter, and a kind spring, we could be in for a very good harvest at the end of this year.

"You could arguably see some downward pressure on prices, in September and October, at the earliest.

"The caveat on all this is the weather - we see, time and time again, we have a particularly cold, wet winter, and a very dry spring, and all bets are off, as to what we end up with."

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Dairy Australia industry analyst Sam Leishman agreed the favourable start to the season had improved pasture availability and pushed down the need for purchased feed.

"Since January, cereal hay prices have eased by up to 40 per cent across the country,' he said.

If we don't get too much of a wet winter, and a kind spring, we could be in for a very good harvest at the end of this year. - JOHN MCKEW

But Mr Leishman said conditions remained varied, from state to state.

Cereal hay was trading at a 17 per cent to 50pc discount, compared with mid last year, but a dry start in WA and limited fodder availability in Tas had kept prices elevated in those regions.

"The spike in demand usually associated with the cooler weather hasn't been fully experienced," Mr Leishman said.

"With low volumes currently been traded, and a favourable weather forecast, it's expected supplies will continue to grow, unless demand increases."

Improved winter crop prospects, combined with softening offshore markets, had also started to see local grain prices ease.

"In Australia's south-eastern states, widespread rain and increased soil moisture has provided an optimistic start to the winter cropping season," Mr Leishman said.

"In comparison, northern and western cropping regions didn't receive significant early rainfall, impacting production forecasts."

In the South East, prices have come back somewhat on those seen this time last year, with cereal hay averaging $250 a tonne to $300/t - down from $370-$410/t in early July 2019.

Lucerne hay, at $350-$400/t, was about $110/t cheaper, straw about $50-$60/t cheaper and pasture hay down as much as $150/t in the past 12 months.

In the Central district, cereal hay dropped signicantly from $370-$410/t in 2019 to $200-$250/t, while lucerne and straw hays were down about $50/t to $400-$480/t, and $90-$140/t respectively.

Nitschke Chaff & Freight's Matthew Nitschke said demand had well and truly slowed in recent months.

"Hay has pretty well come to a stop in a lot of places," he said.

"As we speak, no one is ringing the phone off the hook, looking for hay."

Mr Nitschke said there was some demand in other states, particularly in Qld again, which has not had the follow-up rain hoped for.

He said while prices had been subdued, they had not returned to the levels before the drought, with these potentially being the new levels expected for good quality hay.

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