Export hay prices welcome news for growers

While challenges remain for export hay, recent price announcements for this season were better than anticipated.

New season export hay prices are in the market and the news is welcome for dedicated hay growers.

Gilmac Mackie Hay have announced their prices of $280 a tonne for top grade delivered processing plant with the bottom of their 10 grade scale sitting at $190 a tonne.

Top up payments may be added to these depending on trading conditions in the first quarter of next year.

Balco Australia, like Gilmac, operate in all three exporting states of Western Australia, South Australia and Victoria and have pitched their top grade price at $295 a tonne as a fixed price and their tenth grade is $195 a tonne.

Other exporters are expected to release their prices shortly.

While these prices are $60 a tonne below last year’s prices, those growers who contract paddocks of oats to hay exporters each year were anticipating a lower rate this season.

Lower WA hay production last year and wet curing conditions in Eastern States drove exporters to bid up for oaten hay last year.

Australian hay exports from 2013.

As export hay demand is linked to the affordability of dairy farmers of importing countries, challenges remain for export hay.

The pandemic spike in corn, vegetable meal and hay prices, combined with flat milk prices in Japan saw the profitability of Japanese dairy farmers plummet to all-time lows in late 2022 and recovery has been slow since.

Last year Japanese hay imports were down 25 per cent year on year.

Although exporters who lost access to the Chinese market in February 2021, regained access a year ago, Chinese imports from Australia have only reached half of the levels prior to 2021 due to a build-up of dairy products and a declining dairy herd.

The extended sailing times due to the armed conflict in the Red Sea has reduced exporter’s access to shipping containers but shipping rates are at or below their pre- pandemic levels.

But the new season prices are still $100 a tonne higher than the opening price for 2021-22 season.

As US ranchers were desperate for cattle feed in the 2022-23 season, prices of alfalfa, bermuda and timothy hay prices surged US$120 to $130 a tonne or 40 per cent.

Because of this price change and the marketing efforts of hay exporters, the market share of Aussie oaten hay has jumped in Japan from 20 per cent in the three years to the end of 2021 to 25 per cent while US hay has fallen from 70 per cent prior to 2021 to 62 per cent.

Similar trends are found in the second largest market of South Korea.

While the hay growers in the US and Spain have recovered from drought, the price of their export hay has stabilised.

Competition between exporters remains as new export plants are scheduled to open in the next 12 to 18 months.

Frosted cereal hay can have high nutritional value for stock and exporters have some demand for wheat and barley hay at a $15 to $20 a tonne discount to oaten hay.