A RACE to secure hay for winter is seeing fodder travel thousands of kilometres across the eastern states.
Hay listings are lasting just a few hours as fodder-hungry livestock producers fight to secure supplies. One offering of 7000 tonnes of hay from the Wimmera marketed last week as “the last large parcel of hay in the country” was met with hundreds of inquiries, and is now on its way to buyers in a huge stretch from Bendigo to Toowoomba in Queensland.
Extended dry conditions in NSW and Queensland and parts of Victoria, including Gippsland, led to the initial increase in demand.
But the need for hay spiked as livestock producers across much of eastern Australia realised they were not going to get an autumn break.
The surge in demand has seen:
TWO years of hay supplies sold in the past six months.
PRICES increase, although not yet reaching the extreme levels of 2013-14.
CONSTANT movement of hay along the Newell Highway and into central Western NSW, northern NSW and Queensland.
HAY snapped up within hours of being listed for sale.
Australian Fodder Industry Association chairman Frank McRae said two seasons of hay had been sold in the past six months as demand hit record levels. Mr McRae said there was now a procession of hay trucks heading large distances, with fodder heading from South Australia and Victoria into NSW and Queensland.
“We had a board meeting in May and there seemed to be plenty of hay in an area stretching south of Charlton,” Mr McRae said. “Some of that hay would have been made in 2016 and I think a lot of that hay would have moved now (been sold).”
Mr McRae recently bought hay himself, and trucked it from 200km north of Adelaide to his farm at Orange, NSW, at a freight cost of $5/km for the 1000km trip.
“In some cases, the freight cost is going to be more than the cost of the fodder but people simply need it and so have to pay for it to come a long distance,” he said.
Mr McRae said livestock producers who could not get hay may look to other sources of roughage such as rice straw or cereal straw, but many would also consider selling stock.
Australia’s largest fodder sales company has seen a spike in demand in the past month as livestock producers try to source supplies to last them through winter.
Fodder Central managing director Tim Ford said his company has doubled its sales in the past six months. “Prices have risen from historical lows but a lot of growers have stored this hay since 2016,” Mr Ford said. “Sales in the past month have been pretty intense but for us, demand started in January and just kept growing.”
Prices have risen in the past two weeks, but especially in the past three months. Oaten hay, which was $80-$120 a tonne three months ago, now sold at $150-$200/tonne while vetch, which was $150/tonne, was now $250-$320/tonne.
“Prices are not at the 2013-14 levels and there is still room in the market for prices to go up,” Mr Ford said.
“Hay supply is very short and we are encouraging suppliers to make whatever hay or silage they can to help livestock producers with supply.”
He said some hay vendors may be holding out for higher prices but “supply is short”.
Mr Ford said demand had also increased because livestock producers were prepared to spend up on the back of better commodity prices.
“Wool prices are good and lamb prices are good and cattle prices are still OK, so it is worth it for people to spend on feeding their stock to do well and be productive, rather than just keep them going,” he said
Jumbuk Ag principal Colin Peace said hay prices hadn’t hit the same level as 2008, when cereal hay peaked at $350 a tonne delivered to farms in the Goulburn Valley.
“In 2013 when it was dry it got to $310 a tonne and in 2016 it hit $260 a tonne,” he said.
“If NSW has a poor growing season and then east coast gets a dry autumn it turns the hay market on its head.”
One online hay trader said it was receiving 25 inquiries for each lot of hay that went on the website, with lots that had been listed for two years selling in the past six months.
“Within our team, we are calling it a hay frenzy.”
Joel Joel farmer Justin Hall said he recently advertised hay, late one night, online, while working on the tractor.
By day break, he had 12 phone calls.
“I had to take the advertisement down that morning,” Mr Hall said. “All the hay I had was sold in a matter of hours. It is heading up to Mudgee, NSW, and it will cost almost as much in freight (as the cost of the hay) to get it there.”
Grong Grong cattle producer Andrew Lloyd has bought about 500 tonnes of hay to feed his herd of Angus cattle. He started securing supplies in March and has watched as the prices have increased.
“Thankfully we started buying early and paid about $220/tonne landed on farm, but if we were buying now, it would be considerably more,” Mr Lloyd said. “The sheer demand for hay from Queensland through NSW will be hurting the hip pocket of many producers.
“We estimate it will cost about $120 a head to feed the cattle but it allows us to take them on to heavier weights.”
CommBank analyst Tobin Gorey said the eastern feed grain market remained tight.
“Perhaps the oddest anecdote we heard was from a grower able to sell bales of rice straw as feed – normally it is simply burnt in the field.”
Source: weekly times