Hay prices tipped to return to historic levels

Australian hay prices are tipped to return to historic averages as the country emerges from drought and tackles low stocking rates and the impacts of COVID-19.

A national hay market outlook webinar hosted by Feed Central on Thursday July 23 highlighted the importance of making high quality hay and suggested bale size is likely to be reduced.

Feed Central Managing Director Tim Ford said he expected a return to historical average price positions, although prices could vary across regions and are still subject to market and seasonal variability.

“Unless there is a major wet through spring and summer, we’re not seeing an extremely low price,” he said. “And if it was to turn very dry, I don’t think the cattle are there to see an extremely high price either.”

“The best way to go forward is to differentiate on feed tests, visual quality, bale weights and location and producers can use our system to test that.”

Mr Ford estimated a northern Victorian cereal hay price of $150-$250 per tonne based on a 600kg bale weight, with the higher prices destined for the export market.

For lucerne hay, Mr Ford hoped $300 a tonne could be maintained from farms in norther Victoria, potentially up to $400 depending on quality and feed tests.

Vetch hay will be in the middle of those prices. “Vetch hay is now well regarded and if shedded and in good colour it will present well to the market,” Mr Ford said.

Mr Ford said the market had seen the drought contract, a large amount of dry feed in the north and ideal pasture conditions in the south, combined with low stocking rates and agistment being available when needed to help with the feed gap.

COVID-19 has also impacted on the five-star hospitality end of the market, adding to general poor confidence.

Mr Ford also said the $150,000 instant tax write-off had a big impact on the fodder market, with money spent on new machinery, rather than hay in the lead-up to the end of the financial year.

For the 2020-21 season, quality will be paramount. Mr Ford recommended high density bales for efficient storage and suggested farmers organise their shedding and finance for a normal selling season.

“The last thing we want to see is the market affected by the person who needs cash,” he said.

Mr Ford expects to see a trend to slightly shorter bales. “Shorter bales are more convenient for storage and loading onto trailers, handling and putting into feed bunkers and I expect to bale length to drop a fraction, especially now that we’re getting such good bale weight,” he said.

Feed Central inspected about 300,000 tonnes of hay across the country in the past year and Mr Ford said there had been a massive improvement in quality which he attributed to industry education, recognition of the benefits of producing quality hay and the dry season.

A total of 97 per cent reached an energy level of 9.5, 68 per cent achieved the minimum visual score, 81 per cent reached bale size and 97 per cent bale weight over 600kilos, 65 per cent was shedded and 97 per cent reached target moisture levels.

“That’s a big reason to congratulate all growers for their continued focus on quality,” Mr Ford said.

General Manager Cieran Maxwell advised growers in the feedlot and corporate sectors to have their storage organised as product won’t move off the paddock as it has done so over the past two seasons.

“High quality matched with high density bale weights will again be the keys,” he said. “If the season requires it, sacrifice a quantity of yield for quality. Lower quality product will take longer to sell and move.”

Mr Maxwell said producers should have finances ready for a possible prolonged selling period. “The market will not necessarily be coming to you this season. There is no tolerance for lower, or varied quality feed. Bunk attraction is paramount and aroma and ration texture essential.”

National Sales Manager Neville Janke said general uncertainty in the market due to the global situation combined with low cattle numbers mean a lower demand on hay stocks in the beef and dairy sectors.

Mr Janke predicted limited movement of hay over the next three months. New season cereal hay and vetch hay will be in the box seat for the six-month outlook but Mr Janke advised growers to work on a storage plan and fill sheds. “Don’t pin any hopes on a big flurry of buyers `off the paddock’ as we have seen in the past,” he said.

For the nine-month outlook, cereal and protein hay would be required for backgrounders and dairies.

The event also included the announcement of 2019-20 Feed Central National Hay Quality award winners.