INDUSTRY figures are expecting a significant drop in domestic hay production this year, with the current profitability of grain, oilseeds and legumes the major factor.
The outlook for the export market is a little less clear, with companies having varying levels of success as they recover from the non-renewal of export licenses by China last year.
Australian Fodder Industry Association chairman, and Mallala hay and graingrower, Brad Griffiths expects less opportunistic production this year particularly from those getting contractors in to cut and bale.
"There's definitely going to be a reduction in hectares planted (for hay)," he said.
"Profitability is a big reason, with strong prices for canola, lentils and wheat.
"There is an extra labour and time component when growing crops for hay rather than cereals, and the cost of producing hay is very expensive when taking factors like fuel and labour into account.
"Canola and barley are probably the two crop types that will compete with those hay growing hectares. They're decile ten prices, so it's hard to make a case for hay at the moment."
Figures from ABARES' June crop report show the area sown to canola in SA has risen 11 per cent to 255,000 hectares, while wheat plantings have risen 4pc to 2.15 million ha.
In its latest hay report for Dairy Australia, AFIA say hay prices will likely rise as the season wears on "to reflect the increasing costs of inputs and commodity prices for alternative crops".
While the report is predicting a big hay shortfall this year, it said supply availability would become clearer in Spring once the vagaries of the growing season had come to pass.
Supplies of hay are currently low in the South East, according to the report, with much of the remaining supply already contracted, so reports of shortages are expected to increase.
Balaklava hay and grain producer Rob Saint said while he was contracted and committed to growing 160-200ha of oaten hay for exporters Balco and Gilmac, and had a reliable domestic market for his vetch hay, he agreed that opportunistic production was likely to fall this season.
"Those that might normally cut a paddock down of wheat, that's grassy, for hay are unlikely to do that if wheat is $550-$600 a tonne," he said.
"The return per hectare on domestic hay wouldn't be too far behind wheat, but you've got a lot of extra workload.
"If you're doing 2.5-3t/ha with grain, you'd be doing 6t/ha with hay because you're taking the whole plant.
"At $200/t for hay that's $1200/ha income, whereas 2.5-3t/ha of wheat at say $550 is more income/ha and without the extra workload that comes with hay.
"If you're not set up for hay and have to pay a contractor to do it, it becomes uneconomic."
The Saints run a 2500ha cropping rotation, with a third sown to wheat, a third to barley and a third to hay and legumes.
They sell high protein vetch hay to predominantly dairy clients, who like to mix it with meadow hay to feed their cows.
"Up until last year, we were doing a lot for the domestic market because it was dry in the eastern states," Mr Saint said.
"With rain over there, we switched our focus to export hay. "
With exporters effectively blocked from the China market last year, the Saints were only contracted to grow 25pc of their usual hectares, but are back to their full allocation this year in what is a positive sign for the export industry.
A year after the majority of Australian hay exporters didn't have their export licences renewed by China, still only three interstate companies have access.
Balco procurement and field service manager Pat Guerin said while the Balaklava-based company had done well to find and develop new export markets to fill the void, their experience wasn't necessarily indicative of the industry at large.
"Over the last season we have consolidated our market position in other marketplaces and continued to develop alternate marketplaces," he said.
"Developing new marketplaces is Balco's bread and butter. It's working quite well and our traditional customers have been happy to take on extra product from us once it became available."
While Balco have been able to offer growers higher allocations of oaten hay growing hectares and will likely be able to source enough to meet their customers' demands, Mr Guerin said the wider industry acknowledged the total area dedicated to growing cereal fodder for export in the southern states would be down on historical levels.
He said while it was difficult to forecast future export hay prices due to supply and demand and season variables, the option would need to prove its value to growers if it was to sustain its long-term place in rotations.
"It's nigh on impossible for us to say what pricing will be (later in season), but if we want a long-term sustainable export fodder industry then we need to support the relative contribution value of hay into the cropping rotation and make sure it's positive for growers," Mr Guerin said.
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