How the dry weather is impacting hay and grain markets

Hay supplies in southwest Victoria are dwindling while cereal hay is being trucked in from Glenthompson and Willaura for dairy farms near Koroit and Timboon.

According to beef merchants, beef producers are more concerned as cattle require taller standing pasture than sheep and many cows are about to calve. Picture: Zoe Phillips

HAY:

While coastal NSW and the wheat belt of Western Australia have scored some early autumn

rains, dry paddocks in southeastern Australia are causing some major concerns for livestock

producers.

Hay supplies in southwest Victoria are wearing down and cereal hay is being trucked in from

Glenthompson and Willaura for dairy farms near Koroit and Timboon.

Dairy farmers near Mount Gambier say the dry weather has caused a big increase in the number of hay trucks on the roads since the last decent rainfall event on January 7.

Lucerne hay from Millicent is proving popular with dairy farmers as the summer forage crops

have been consumed early in the dry weather.

Large square bales have been selling at $350 a tonne ex Millicent farm immediately after baling.

Some households near Hamilton are low on rainwater and are buying in tankers of water

and water levels in bores and dams is shrinking.

The lived experience matches the weather models.

According to modelling by the Bureau of Meteorology the coastline from Robe to Port Campbell and 50km inland is the driest relative to average soil moisture in the country.

This dry also includes King Island where pastures for beef and dairy cattle have plummeted

due to the dry spring and summer.

Although the Tasmanian Government has announced drought relief funding for King Island, isolation is proving particularly difficult for cattle producers.

Abattoir pace and shipping is limiting destocking of cattle on King Island and hay imports are problematic.

The dry extends further south across the Bass Strait as fodder supplies in northern Tasmania are become desperate.

With round baled pasture hay and silage selling for over $400 a tonne ex farm in northern Tassie, the State now holds the dubious honour of having the highest hay prices in Australia.

Back in Victoria hay merchants are resorting to buying two and three year old hay in large

square bales that have been paddock stacked often without any caps or tarps.

Rain has typically caused advanced breakdown of hay in the top bales but the overall quality and delivered price is still perceived to be less than paying higher freight for better quality cereal hay in the Wimmera and Mallee.

This could all be fixed with a general rain of 50mm but there is little forecast next week.

The three month outlook from Agriculture Victoria reports are for warmer and neutral to drier

weather.

Sheep producers are still buying in hay as they are aware that viable feed will still take 14 to

21 days to grow even if it rains next week.

According to hay merchants, beef producers are more concerned as cattle require taller standing pasture than sheep and many cows are about to calve.

Some dry cows and young stock have been trucked out of the region to the Riverina on agistment but in-calf heifers and cows are kept locally and need feed for autumn and winter.

GRAIN:

Grain markets are slightly higher in both domestic and international markets as the enthusiasm of sellers appears to be weakening.

In contrast oilseed markets are firmer as prices return to the harvest levels of last December.

In the past week, canola prices have risen $22 a tonne or 4 per cent.

As many growers sold their canola during harvest, new crop bids of $665 a tonne on a

Victorian port basis are of most interest.

At this price, most delivered country site prices are between $630 and $640 a tonne, well over a target price of $600 a tonne.

Some dry weather is appearing in key oilseed production regions.

Although rainfall had been improving in Brazil early in the year, most central and southern regions have received about half their average rainfall in the past month.

The soybean harvest for most of these crops is not expected until the end of April or May.

Dry weather is also a concern for producers in North America.

In May and June US growers will plant their soybeans and Canadian growers will plant their canola crops.

Ahead of this time, major deficiencies in rainfall are occurring in Minnesota and South Dakota in the US and Saskatchewan in Canada.

In grain markets the international futures exchanges showed a mix of higher and lower prices with traders reporting most buying inspired by traders taking profits and covering their earlier sales.

A small reported improvement in Russian values is attributed to short term logistical restrictions of shipping.

The lower wheat and barley prices since harvest have been unattractive for many Victorian sellers and according to traders, growers are holding a higher volume of unsold grain compared to most years.

Brokers report a slight improvement in wheat prices to Melbourne mills and packers with ASW and APW grades, $3 and $4 a tonne higher respectively this week.

This restricted level of selling has been particularly prevalent in the barley market and buyers are showing more interest in any offers to sell.

BAR1 grade barley is $6 a tonne higher this week at $327 a tonne delivered Melbourne.

With preparations for sowing of new season’s crops well under way, growers are encouraged by the slight improvement in new crop prices for wheat and barley, a first in six weeks.

The multigrade APW wheat bid by exporters is unchanged at $328 a tonne while the BAR1 grade barley bid is up $2 at $282 a tonne on a Victorian port basis.