Hay buyers should move quickly to book in supplies, experts say

Subdued livestock prices are the only thing holding back hay rates as a shortage of roughage looms ahead of winter.

Demand for hay has leapt in the past three weeks in key grazing regions, as dry conditions continue to whittle down pastures and stock condition starts to slip.

Vic Dohle, from major hay producers and suppliers, Green and Gold Contractors, Hamilton, said this week buyers looking for hay that haven’t booked it in in the next week or so “might have trouble finding it, or they will end up looking on the open market”.

Green and Gold operators in the forward selling market but Ms Dohle said hay prices had jumped up on the open market, with recent listings including clover for $400/tonne.

“Prices generally have come up a bit but they haven’t skyrocketed as there is no money in livestock at the moment,” she said.

“Generally, there is not much hay around, at all. We’re sticking to (supplying) our regulars, we are not taking orders from others unfortunately.”

Meanwhile in Tasmania hay supplies are running out and Western Australia is also suffering a very dry period. In South Australia many usually reliable regions such as Lucindale are also still waiting on an autumn break to sow winter cereals.

Farmers are weighing up the benefits of selling hay to take guaranteed income now, or feeding stock through a dry period, with the risk of cost blowouts. Picture: Zoe Phillips

Riverina NSW producer and Australian Fodder Industry Association chair Louis Kelly agreed there was “not a lot in the larder box” when it comes to hay supplies.

As a consequence, there was likely to be a tightening in the gap between high quality hay prices and rates on lower grade hay, Mr Kelly said.

He said many people were now making tough decisions about whether they sold hay or kept fodder reserves to feed livestock, reducing the need to destock.

“Dry times will affect different districts in different ways, here we have irrigation and big volumes of water but many areas don’t,” he said.

Financial strain was showing for many carrying debt, he said, and this influenced their appetite for the risks involved with feeding stock through dry periods.

“A lot of people have a lot of exposure now, and with interest rates having gone up so they are trying to work out what the future will hold, do they sell their excess hay now, but we are not in August or September when they can see the next crop growing, and so do we sell stock or do we destock?” he said.

“Just a few years ago people saw (PTIC) cows and calf units selling for $5000, but now, you could get those animals for $1500 so people are weighing up if they buy fodder now and keep stock.”