Storms cast pall over hay demand

Extensive rain has fallen over vast areas of eastern Australia. See how it could impact hay markets.

Rising supplies: Declining demand will see hay stocks continue to rise in Victoria and South Australia.

MILD temperatures, combined with summer storms, are boosting pasture growth on and south of the Great Divide in Victoria and along the south coast of NSW.

Buyers generally are in no hurry to fill their empty sheds.

Extensive rain delivered 50-70mm to many properties in eastern Victoria and those falls extended deep into central and northern NSW.

The subsoil moisture levels for graziers are over 50 per cent of root zone capacity, which is well above average for this time of the year.

These trends bring downward pressure on hay markets and summer fodder production is adding to an already abundant supply of hay.

Cereal hay demand is yet to appear in any meaningful volume and summer demand for protein hay remains the most active of a quiet hay market.

Temporary water prices are as low as $110 a megalitre and lucerne hay from the central west and southeast South Australia is selling down to $230 to $250 a tonne ex-farm.

Beef and some dairy farmers are appearing as the most active buyers.

While the commodity markets are supporting both of these sectors, the beef herd rebuild is delayed further by strong cattle prices and the attraction for producers to sell more stock.

Given the current outlook, hay stocks in South Australia are likely to build from 20 per cent of total demand last year to 42 per cent at the end of October this year.

Similar trends are expected to see Victorian hay stocks build from 31 to 43 per cent this year.

But weather in the next six months can alter hay demand.

As the weeks pass and time gets closer to the conventional timing of the autumn break, buyers are more likely to step into the market.

The recent storm activity has been unseasonal, and six of the 12 weather models monitored by the Agriculture Victoria are predicting a wetter period in the next three months.

This may have consequences for hay demand during autumn.

If soil moisture levels climb and remain high for the autumn break, boggy soils may limit the carrying capacity of pastures, boosting hay demand.

Hay demand may also be supported if the break is delayed to well into May and June. Hay buyers will be reluctant to be competing for hay in a rising market.

While hay merchants struggle to find buyers at present, they normally become more active in April and May.

MORE

BEEF PRODUCERS GIVE A LIFT TO VETCH PRICES

BUYERS STARTING TO SHOW INTEREST IN QUALITY VETCH

FEW OPENINGS FOR GROWERS TO OFFLOAD AS DEMAND STAYS LOW