Hay and Grain prices in Victoria and the Riverina

Here’s everything you need to know about current hay and grain prices and how seasonal conditions are tracking.

For dryland croppers in the Mallee, the rains will enable some of their oat crops to push out a grain head, enabling crops to be cut for hay. Picture: Zoe Phillips

HAY PRICE GUIDE:

Rain and cool weather have delayed the cutting of hay, to the detriment of quality.

Falls were generally better than expected particularly in the Mallee.

For the week to Monday morning, Hopetoun picked up 31mm, Charlton 28, Netherby 95 and Deniliquin scored 60mm. The dairy regions of Gippsland picked a general 50 to 55mm from Warragul to Yarram.

Some regions missed the larger falls with Horsham receiving 22mm for the week while Warnambool received only 9mm.

Not to say that they take rain for granted, many are saying that they are happy to see clear skies for a while.

Vetch growers who decided to cut their crops ahead of the rains are unsure how their windrows will manage with the magnitude of the rains.

As green windrows, most plant material will shed moisture readily and not suffer bleaching like a dry windrow. However, the scale of the recent rain event in the northern Wimmera will see windrows laying over wet soils, extending the curing time of vetch hay.

The rain has also delayed preparations for planting maize silage, but according to contractors, this timing is still not critical as most silage is not planted until mid-November.

With low-cost water this season, the business case for maize silage is positive as all variable costs tally up to approximately $180 a tonne dry matter, ensiled on farm. However, the level of interest in planting maize silage is declining.

With urea hitting $850 a tonne on farm and industry experts suggesting it could reach $1000 this week, dairy farmers are aware of the impact fertiliser has on the cost of growing maize silage.

While the cost of water allocations is lower this year, fertiliser has replaced irrigation water as a potential rate limiting input cost. Some gross margins show that last year water costs represented 47 per cent of the total variable costs of producing an 18 tonne a hectare crop of maize silage, while fertiliser was 12 per cent of the total. This season the proportional water costs have declined to 32 per cent and water is up to 24 per cent.

Although some dairy and beef farmers are choosing to apply urea progressively through the season, others are avoiding the upfront costs of producing maize silage, preferring to buy in hay when needed.

For dryland croppers in the Mallee, the rains will enable some of their oat crops to push out a grain head, enabling crops to be cut for hay. Further showers less than five mm are forecast today for most parts of southeastern Australia.

Despite this, the cutting of cereal hay crops should commence in earnest this week as growers aim to capture as much quality as can be economically conserved from their crops.

The late rains will add an additional complication of regrowth from cereal crops. To ensure that cured hay is not laying over fresh regrowth, threatening higher moisture material at baling, some paddocks will be desiccated with a herbicide prior to cutting.

GRAIN PRICE GUIDE:

Rain has been warmly received by grain growers, providing most for the moisture needed to see many crops in Victoria and the Riverina through to harvest.

Accordingly, traders have reported a general increase in the forward selling of grain.

Since the start of April, wheat prices have increased $72 a tonne, barley prices are up $54 and canola is up a massive $337 a tonne.

International factors have once again pushed prices up higher with further reports of declining winter wheat plantings in Russia, cash wheat and corn demand and declining stocks reports from the US Department of Agriculture.

Despite the $13 to $18 a tonne uptick in Chicago and French wheat futures, the ASX lifted only $5 a tonne.

However, lentils and chickpea prices have eased and a key barrier for pulse traders is shipping. Until Covid-times, pulse traders would buy product, sell it to the importer, and then book the shipping freight.

According to traders, August was particularly difficult for shipping. Some traders had bookings for 90 containers cancelled and were then offered postponed shipping for only half of the consignment at rates $500 a container higher.

The contractual, logistical and reputational complications of this have meant that many traders now book their container freight first, wait till the shipping is confirmed and then hurriedly contract their counter parties and container packing to finalise the deal.

This style of trading has meant that traders have reduced their volumes to only 15 per cent of normal.

Other pulse traders have shifted their shipping to booking holds of bulk vessels. Those traders who have this bulk capacity are favoured by the challenges to container shipping and are finding the container shippers less competitive in the market.

Container export volumes are not entirely determined by the cost and availability of shipping containers as drought and global competitiveness are also big factors. However, the volume of wheat and pulses exported through the Port of Melbourne this year is back approximately 30 per cent from the pre-Covid and pre drought volumes of the 2016/17 season.

The cost of container shipping may be softening as rates for 40 foot containers on the highly profitable route from Shanghai to Los Angeles eased 2 per cent last week, falling $347 a tonne to $16,745 a tonne.

The global container freight price benchmark, the Drewy World Container Index, eased 0.2 per cent on this news.