$160 a ton for hay
IT MAY not be as spectacular, and it has a more domestic focus than the grain price run-up, but Australian hay and fodder prices have also posted healthy gains over the past four months.
Australian Fodder Industry Association (AFIA) analyst Nick McClelland said prices for pasture hay had more than doubled since October last year, with much of the price rise in recent months.
Values have lifted around $80/t, to around $160/t, while lucerne prices have come up by $100/t.
He said the fodder complex always had some correlation to what was happening in feed grain, but rather than the US corn crisis being the major factor, it has been a lack of quality Australian product and a substantial feed drought in south-eastern Australia that have been the major issues.
“In key fodder using areas such as Gippsland and the Western District farmers are still having to feed out hay – in the Western District, the break was too late to stimulate much growth in the colder weather, while Gippsland has been too wet, so there is little feed there either.”
He said this has meant farmers holding reserves of severely weather-damaged 2010 hay, that endured the brunt of the La Nina rain of the summer of 2010-11 on it, have been able to find a home for it.
“I’ve heard of sales of hay that was perhaps even going to be burnt as there was no market for it, just because farmers want to keep their herds and flocks going until there is some more feed when the weather warms up, and there is so little 2011 fodder around, so the poorer quality stuff is basically all that is about at the moment.”
Mr McClelland said this meant feeders did not have the option of switching out of increasingly expensive grain into fodder as there was none about.
“There are good stocks in the Bega Valley in NSW, but otherwise there is little fodder about, probably because of the poor hay prices on offer last season, which meant there was a very low planting of hay crops.”
He said export-focused markets, such as in South Australia and Western Australia continued to have strong demand, primarily for oaten hay to Japan.
However, he expects fodder production to increase this year.
“In 2011, there was a 40pc drop in oaten hay acreage throughout SA and the Wimmera – Mallee, but that has increased again this year, so we are on track for a more normal year production-wise.”
He said there was scope for some substitutability between hay and grain in feed rations, but said it depended on the quality of the hay and the flexibility of the feeder, with many preferring to stick with their regular ration if possible.