Why hay producers could have their best result in years

It’s been a tough few years for hay producers, but three factors could see the fodder market have its best season in years.

Eastern Australia’s fodder market is poised for its best season in years as exporters open up with rates of $250-$350 a tonne for oaten hay.

A trifecta of a low Australian dollar, the return of China into the hay market and a kick in domestic sales as dry conditions bite could see demand eat into this season’s fodder and the fodder made in the past two years.

FeedCentral managing director Tim Ford said exporters had made an early call of $250-$350/tonne for top quality oaten hay which had set the pace for this year’s cereal hay prices.

Hay is expected to sell well this year, both freshly made fodder and that made in past years.

“Wheat and barley hay will come in a bit under this, but it’s still a good early indication of where the market is heading,” Mr Ford said.

It is too early to determine lucerne hay prices but these usually sold at about a $50 premium to oaten hay, he said.

Mr Ford said he was surprised the market was so buoyant.

“The market has opened much stronger than we expected after the El Nino announcement and because it’s already really dry in a lot of places,” he said.

“There has been unusually strong neighbour-to-neighbour private trade that had removed a lot of product from the system.”

Mr Ford said there was still a hangover of poor quality hay from the past two seasons, and this would fill the roughage gap normally taken by straw.

“I would caution against speculatively making straw as those in dry areas looking for roughage will be able to buy that poor quality hay,” he said.

Australian Fodder Industry Association chairman Louis Kelly said he had heard stories that people would pay “$400 a tonne for anything you can get a string around”.

But he said it would be difficult for livestock producers to pay much for fodder given it would cost up to $250/tonne for transport alone, let alone the cost of the hay, and on the back of falling livestock prices.

Mr Kelly said he felt there was not much carry-over hay in the system, and any freshly made would sell well and quickly.

Livestock prices could determine how much demand there is for hay this year as producers do the sums.

Tatura producer Rob McCarthy said he was uncertain about how the market would play out this year given the dip in livestock prices.

Mr McCarthy usually makes up to 1000 big square bales and sells about half, but said “no-one knows what demand for hay will be”.

“When stock are not worth as much, you wonder if people will be willing to buy hay to feed them,” Mr McCarthy said.

“And it is so expensive to make hay — you can’t do it for nothing.”