Cattle on feed numbers down but hay demand solid

Cattle on feed numbers down but hay demand solid

Grains
Australian fodder producers will have to wait longer for sales this year but all hay is expected to sell according to Feed Central.

Australian fodder producers will have to wait longer for sales this year but all hay is expected to sell according to Feed Central.

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Numbers of cattle on feed have come back, but fodder industry specialists Feed Central believe demand for hay will remain solid.

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AUSTRALIA'S number of cattle on feed is likely to drop a whopping 20 per cent from its December high of 1,239,563 but while it may be tougher to make sales, fodder makers will still find a home for their product.

This was the market analysis from Feed Central general manager Cieran Maxwell during a webinar hosted by the fodder information platform last week.

"There has already been a 12pc drop in numbers on feed in the January-March quarter and it is likely the total fall will exceed 20pc," Mr Maxwell said.

"Such a fall is unusual, but not unheard of, especially with feeders facing stiff competition from restockers and the grass-fed cattle sector."

Combined with an improved outlook in terms of seasonal conditions that will mean more fodder availability, Mr Maxwell flagged a different selling dynamic this season.

"There is going to be a lot less non lotfeeder demand and that is going to mean farmers will have to be more patient in their sales program," Mr Maxwell said.

"Buyers will likely look to hold back on purchases rather than race to get supplies as has been the case in the past two seasons."

However, he said the fundamentals of the lotfeeding sector were still supportive of the fodder industry.

"Margins will remain tight but in favour of lotfeeders are lower commodity prices, coming back from record highs, meaning cheaper feeder cattle, a competitive Aussie dollar and a lack of COVID-19 impact on the high end domestic market."

Mr Maxwell also said that a good local season could allow the national herd to rebuild with greater numbers of feeder cattle bringing prices back to more sustainable levels for intensive livestock operations.

While he expected hay demand to be steady rather than strong, Mr Maxwell said the situation could change quickly.

He said there could easily be a wet hay making season that could change supply and demand dynamics.

With parts of coastal NSW enduring up to 300mm in the past week a significant amount of drying will be required before pasture growth resumes in the wettest of those areas given the short days and low evaporation rates of winter.

If the status quo remains and there is a good fodder season Mr Maxwell said quality would be the key differentiating factor.

"Good quality and high density hay will sell first."

The story Cattle on feed numbers down but hay demand solid first appeared on Farm Online.

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