Feed grain prices starting to drop

Feed grain prices have fallen to $420 a tonne as recent rainfall boosts crop confidence, but Victorian farmers warn feed shortages persist.

Drought-driven feed grain prices are finally unwinding, with feed oats down $15 this week to $420 a tonne, a sharp drop from May’s high of $480 a tonne.

Confidence in the new-crop and recent rain have eased market pressure, contributing to the price falls. Barley prices have also eased about $6 a tonne this week, with Melbourne feed grain trading at $362 a tonne as traders clear old stocks ahead of a promising season.

Farmers say the price decline is directly linked to recent rain, but severe feed shortages remain in parts of Victoria, particularly the Western District.

Hay prices have shown the first signs of plateauing after eight consecutive weeks of rises, though livestock producers warn the situation is still challenging.

VFF Livestock Group President Scott Young. Picture: Zoe Phillips

Victorian Farmers Federation livestock group president Scott Young said farmers were going to be hand feeding stock for some time yet.

“It is cold and there is limited growth and the (grain) feeders are still in the paddocks,” he said.

“The grain prices has been pretty high, so it is good that it is coming down,” he said.

Mr Young said the recent rain would be attributed to the prices weakening, but he cautioned that pasture growth was slow.

“There is not much growth, my soil temperatures are 7C,” he said.

Grain Brokers Australia consultant Peter McMeekin said the recent rain brought some certainty to new-crop potential.

“South Australia, Victoria and southern NSW still require rain and a kind spring, however, the crop is in the ground so growers have a seat at the roulette table,” he said.

Mr McMeekin said the poor crop last year, particularly in Victoria, meant domestic supply was tightening up, but the prospects of the new crop, combined with recent rain, had caused prices drop recently.

“Three months ago, the new crop was at a $30 premium to the old crop – growers were getting paid to carry it. Now it is $10,” he said.

Prime sheep: David Hill of David Hill Livestock and Property, Albury, pictured at Wagga Wagga sheep and lamb market. Picture: Nikki Reynolds

Livestock agent David Hill of Albury in southern NSW said for farmers who were hand feeding, the saviour was the fact prices were holding up.

He said while prices are good now, farmers got very disenchanted with sheep and lamb prices a few years ago, and there was a certain level of confidence needed to put grain feeders in the paddock.

The benchmark Trade Lamb Indicator is currently 1193c/kg, showing an increase of 406c/kg compared to this time last year.

“Farmers are also looking for grazing crop potential for livestock, rather than relying solely on feed grain,” he said.