Cold snap, mice boost hay demand

Hay demand steps up a notch and while world grain markets have fallen heavily, local prices are following a different trend.

Round bales in paddocks are proving less attractive to mice than bales stored in sheds. Picture: Andy Rogers

While it’s nothing like the demand it was this time two years ago, there is more hay moving on Victoria’s roads and the inquiry levels are increasing.

Cold weather and mice appear to be key factors in driving the interest in hay. The minimum temperatures in NSW and northern Victoria during April have been between 1C and 3Cs colder than average. This anomaly has reached as much as 6C to 8C below average late last month and early this month.

These cold temperatures have combined with dry weather to restrict autumn pasture growth. The rainfall during April was less than 20 per cent of the average throughout the southern half of NSW and northern Victoria.

Many of the inquiries for hay have been from cattle producers in the foothills of the Dividing Range who have stock in good condition.

With cattle saleyard throughput falling since the start of April and the Eastern Young Cattle Indicator maintaining its high price of more than 900c/kg carcass weight, it pays to maintain condition of these cattle.

To achieve this, graziers intend to provide high-quality forage through autumn and winter by buying winter feed in advance.

When selecting hay to buy, cattle and sheep producers are becoming increasingly aware of mice and the levels of infestations throughout the haystacks of NSW.

When contacted by prospective buyers, hay and straw growers are often first questioned about the presence of mice in their stacks and surrounding paddocks.

To combat these high mouse numbers, an extensive series of workshops is being conducted in northern and central NSW this month.

According to the CSIRO and GRDC, high mouse abundance was also observed in NSW as well as northwest Victoria during March. Victorian hay growers report that their strategic baiting around their sheds is managing the risk.

Some anecdotal evidence suggests that when mice are present, hay stored outside can be less vulnerable than hay stored under cover.

One possible reason may be that mice seek out a warm and dry bedding to avoid the cold weather.

For this reason, round bales of hay stored end-to-end in a paddock may be less appealing to mice than hay stored in a shed.

The downside with round bales stored outside is the loss of quality due to the additional moisture in the bales and the reduced transport efficiencies of round bales compared with large squares.

When coming to the market, buyers find cereal hay tonnage listed outnumber the tonnage of vetch and lucerne hay listings by a factor of three.

Of this cereal hay in eastern Australia, 50 per cent is from NSW, 35 per cent is Victorian and 18 per cent is from South Australia.

It appears that mice are threatening most of the cereal hay being offered for sale.

WHEAT EASES AS TRADERS OFFLOAD STOCKS, BUT CANOLA GOES HIGHER

Weather volatility hit international markets hard last week.

Benchmark futures prices for wheat were all down with the Black Sea falling $11.60 a tonne, Paris down $21.10 a tonne and Chicago sliding $25.80 a tonne for the week.

Corn prices on the Chicago exchange had the largest falls, plummeting $45 a tonne.

Some forecasts for rain early last week, combined with investors holding substantial long positions, represented too much risk and traders sold heavily. Later rain forecasts for southern Brazil also soothed concerns for corn yields.

Selling continued later in the week as the US Department of Agriculture supply and demand report delivered an optimistic assessment of grain supplies.

The local cash price response to these international factors was less dramatic as some more immediate factors are impacting prices.

Exporters continue to bid aggressively to ensure their challenging contractual programs are executed. Australian Premium White prices for wheat stored within the central handling system eased $5 to $304 a tonne delivered to Geelong less freight to local silo.

Most of the focus, however, is on the direct delivery programs, which are still paying $330 a tonne delivered to Geelong and $320 delivered to Portland and Port Adelaide.

Wheat futures have fallen globally in the past week. Picture: Zoe Phillips

Grain growers have suffered some lower prices for new crop. APW wheat is back $17 a tonne to $305 delivered to Victorian ports or $317 to Port Adelaide and barley prices are back $12, but canola is higher.

Geelong canola for December delivery is bid this week at $776 a tonne, up $9. Canola growers in the Western District have been selling canola up to half of production estimates.

While these prices are historically high, many growers are not willing to forward-sell just yet.

Dry conditions have delayed sowing in the Mallee and the dry trend for most north of the Great Divide saps the confidence to sell.

Although derivative products such as options and swaps are available and do not involve the sale of physical grain, brokers estimate less than 15 per cent of new-crop sales are made with these tools.

The rally in lentils prices continues, despite subdued demand from Bangladesh. Nugget lentils delivered to Melbourne container packers are bid at $905 tonne, up $85 and new-crop lentils are also up $20 a tonne to $715 delivered to Melbourne.

Speculation is running high that India will soon lower the 30 per cent tariff on lentils to 10 per cent. Rumours are also reported in Canada that 500,000 tonnes of Canadian lentils have been sold to India for May and June shipment.

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