Hay and grain report: Flooded paddocks causing extreme headaches
Fodder growers are still battling with drenched ground, and grain prices are eroding with the extended start to harvest.
HAY TALK:
Harvest problems for fodder growers continue as wet paddocks cause baling delays and
clashes with grain harvest cause a refocus on many farms.
Some contractors in southwest Victoria have managed to complete their round bale silage jobs.
The challenges have been extreme with baling held up regularly due to bogged balers.
Silage yields are commonly much higher this year.
The delay to cutting and cool damp conditions has seen extended growth of pasture paddocks. The thick matted stands of pasture inhibit air flow and soils are slow to dry.
This growth is now high in fibre and the quality is poor.
Despite the higher yields for silage and hay, contractors report that the area cut will be down
this season.
Low lying paddocks that had been flooded by short sharp inundation from local creeks have
been left smothered in silt.
Ironically, a lack of subsequent rainfall has seen the death of these grasses and legumes.
Like all hay production this season, lucerne hay cuts are delayed.
Most first cuts this summer have been as silage due to the restricted curing conditions.
A shortfall in digestible fibre is being reflected in higher hay prices.
The opening hay prices are $50 a tonne higher than this time last year.
Buyers are now looking for all options for their fibre sources for the feed gaps that inevitably arise in autumn and winter.
Although low in protein, almond hulls provide a reasonable source of energy and are considered palatable and a good fibre source.
Almond hulls have been a part of dairy farmer’s potential feed ingredients for many years, but prices are increasing.
New crop almond hulls are expected to be available in February and March next year.
In the past two weeks the selling price for unmilled almond hulls has increased $20 a tonne to $55 a tonne ex processing plant in northwestern Victoria.
The wet season has provided some upside for hay growers.
Long term hay growers who were not happy with the hay prices during 2022, chose not to
grow any cereal hay this season and have carried over most of last season’s oaten hay production.
While this hay is highly sought after by hay exporters, these growers are opting to reserve
their hay from the 2021 season for their domestic clients.
Unlike other commodities, the trade in hay is often focused on maintaining long term
relationships.
GRAIN TALK:
The prolonged start to harvest is seeing grain hit the market and prices are eroding.
Prior to harvest, grain growers have sold very little grain and the pent-up demand for December delivery is rapidly filling.
As one of the first crops to be harvested, canola deliveries have been strong and prices are falling rapidly.
After last week’s fall of $40 a tonne, canola prices in the Geelong and Melbourne port zone have fallen another $55 a tonne this week to $697 a tonne.
This takes the price fall of the past month to 18 per cent or $156 a tonne.
This mirrors the $151 a tonne fall in rapeseed prices on the French futures exchange.
Central Europe has been the main buyer for Australian canola over recent years taking between 50 and 75 per cent of the export crop.
Canola and other export commodities are being impacted by the weaker US dollar and the four US cent hike in the Australian dollar in the past month.
Despite the fall, canola prices are still decile 7.4 and higher relative to most of the prices in
the past five years.
Canola yields have been lower than anticipated due to the seed losses of pod shattering of
crops well overdue for harvest. Oil contents however have been impressive.
The extended growing season has seen canola oil contents in the range of 45 and 48 per cent. Canola receival sites in north central Victoria have been averaging over 46 per cent oil.
At 46 per cent, growers receive an additional oil bonus of $42 a tonne.
Other markets for export destinations for canola are Japan, China and southeast Asia.
Some of these buyers do not pay the same oil bonifications as the European buyers.
As canola sales to Europe fill, buyers are increasingly aware their future sales to Asia may not earn the same values.
Prices for canola and other grains exported to China are also under pressure from the country’s Covid-zero policy.
News of the assembling crowds in China protesting the continuing harsh lockdowns of the Government’s Covid-zero policy, shows that authorities are less likely to open business and trade, dampening Chinese demand for imported food and feed commodities.
Barley deliveries are ramping up as the warmer weather allows harvest.
As expected, the delayed harvest has impacted barley quality.
Central Victorian receival sites are taking in between 25 and 30 per cent of barley receivals as BAR2 grade due to the lower test weights and higher screenings.
Buyers and growers are speculating that wheat quality may be more impacted by the delayed harvest and that the portion of milling grade wheat will be well down this season.
The concern for consumers buying wheat for December delivery is subsiding.
For ASW wheat delivered to Melbourne buyers, the nearby price premium over the price for January delivery was $55 a tonne two weeks ago and is now $35 a tonne.
List: Grain and oilseed prices
Canola prices have increased to $830/tonne in Victoria and wheat is tracking higher at $351/tonne. See how grain and oilseed prices are performing this week.
Canola growers weigh high prices against dry conditions
Canola prices are at the best levels in five years, but dry conditions are making farmers cautious about planting. Many are waiting for rain before making sowing decisions.