District Reports - April 2005

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29 Mar 2005
By Colin Peace

Victoria

Many contractors and hay merchants report two key changes this season compared to last. Firstly there was around twice as much hay contracting work available last year and secondly its not easy marketing hay in the current season.

Summer rains have helped growers and contractors in the north of the state. Mid February was like spring with rich green paddocks of lush lucerne. While some growers have produced three cuts from dryland blocks, most have managed two. The downside to the rains is the downgrading of curing lucerne. Those who have avoided the rains are finding a reasonable market with the chaff mills. Mills have been paying around $200/mt ex farm for chaffing quality. Dairy lucerne bleached from rains have been achieving $160/mt ex farm northern Vic. Even at these prices, lucerne hay is slow to move according to John Farley of Echuca.

Alex Peacock of Rochester said that dairy farmers are looking for source high protein, high energy lucerne but are not willing to pay big money. Compound feed mills are able to compile a ration incorporating lower quality F3 barley for $195/mt.

Russell Philips of Willaura says that buying demand has been quiet but he expects demand to pick up again in winter. Fortunately his pasture is sold and the oaten hay was high quality and was sold early for export at between $120 and $125/mt ex farm.

Some vetch and clover crops were baled in the Mallee and dairy farmers have been prepared to pay between $150 and $160/mt ex Mallee farm for these hay types.

South Australia

Selling hay to SA dairy farmers is also proving to be a challenge this season. The fodder that many dairy farmers are buying is either high quality lucerne or cheap fibre sources such as straw. There is some expectation that beef feedlots will be in the market for fodder in the winter months as beef prices are high.

Western Australia

Prospects for the oaten hay producers in WA are mixed. Low hay prices in season 2003/04 did not inspire producers however prices have improved for the 2004/05 season. Prices for the current crop (being marketed now) are expected to finish between $120/mt ex farm for the high quality hay down to $70 or $80/mt for the lowest quality (harvest delivery without storage or freight).

The domestic market is presenting an opportunity for producers as livestock producers are paying around $120/mt ex farm for oaten hay at the lower end of the quality spectrum. Autumn rains could see this demand dissipate.

New crop prices for season 2005/06 are expected to improve on these rates. Exporters are anticipating prices of between $110 for low quality to $140/mt for high quality oaten hay. It appears that these prices are favourable given the fall in opening prices for new crop wheat.

There is an expectation that some producers will not continue to grow oaten hay this coming season, particularly those who do not own their own hay making gear. Having said this, it would be interesting to see how many producers calculate the per tonne cost of owning and operating a baler.

There is a dedicated group of hay producers within 200 km of Perth who have learnt the tricks of making export hay who are expected to continue to grow hay.

There are also grain growers who are opportunity producers in the eastern wheat belt. These producers have the capacity to sow large areas and exporters have provided them with some relief from the high costs of freight to processing mills.

Processors are feeling the pinch as well with two hay businesses closing their doors, one at York and another that intended to press hay in Freemantle.

Queensland

The wet spring and cheap grain prices have contributed to a slow market for hay in Queensland. Hay making has been difficult prior to Christmas due to the rains however the bore-fed pivot irrigators have produced high quality lucerne during January and February. Late February and March has seen a return to dry times and grain prices have risen.

David Forrest of Kenmore (who farms 30 km west of Texas) reports that despite the high prices for beef cattle, store prices are making life tough for feedlots. While custom feeding of cattle is favourable for feedlots, buying stores for $2.70/kg and selling fat cattle at $1.70/kg leaves little for the lot feeders.

Feedlots have been buying sorghum grain for $115 to $120/mt delivered during February and straw is moving into feedlots at $80/mt. Local feedlots have halved their purchases of lucerne hay this year. Normally they would pay $200/mt delivered for grassy lucerne hay. David adds that dairy farmers in Queensland are not experiencing financially favourable times at present.

Peter Lynch reports that mulch is becoming a more recognised market in Qld. The orchard industry is using mulch in large square bales. This is being spread using a Grizzly machine or a Schuitemaker Balo marketed by Lely.

The machines tease out the straw and lay the straw under the trees. Mulch is popular with citrus growers. Straw is spread for incorporating organic matter in the soil, to control some soil borne diseases and as a means of controlling erosion.

In the domestic market, Peter adds that dairy farmers are quiet, preferring to use their home grown silage. Some dairy farmers may buy the occasional load of lucerne or straw. An increasing number of large square balers are being purchased and used in the state to cater for the demand from dairies and feedlots and to take advantage of the freight efficiencies.

With the dry times at present, western Queensland cattlemen are selling their stock into the high cattle market. Peter expects hay to be scarce in winter. Hay stocks in sheds are low and unlike previous years, few producers are making hay from grain sorghum crops.

Some grain sorghum crops in Central Queensland have failed and been baled into hay. This hay is remaining in the area and is not moving south.

New South Wales

Nick Constable of Forbes reports that there are no river allocations on the Lachlan River again this season. Summer rains have been absent as well with late February rains delivering around 90 mm at Cowra while Forbes received 5 mm in the same downfall.

Locusts have been through parts of the district a couple of times and are threatening to come back. The insects nibbled the heads of cereal crops and caused losses of between 30 and 40 %.

This has put a high floor in the price of hay and cheaper hay is being sourced from the wetter areas along the Murray down south. Lucerne sellers are asking for $240 and $250/mt ex farm yet sales are going to the southern sellers at $180 to $200/mt. Oaten hay sellers are asking $200/mt ex farm.

In early March Nick was on his fifth cut on his irrigated (bore) lucerne and was expecting to get another if it remained dry.

According to Bill Fyffe of Goulburn, demand for hay has been limited. Good stocks of hay are in storage and buyers are using their own or buying from their neighbours before buying hay through merchants.

The moderate levels of hay orders are being filled from supplies in the southern Riverina or from Swan Hill in Victoria. The asking price for prime lucerne hay is $280 to $290/mt while the market is more like $240/mt. Large square lucerne is available in the southern Riverina at $200 to $240/mt. Balansa clover hay is not readily available this season yet pasture hay is moving at between $130 and $140/mt.

Tasmania

Conditions have been dry in Tasmania. Phillip Headlam of Scotsdale reports that he has received only 18 mm from Christmas to the first week of March. All eyes will be on the skies for the Autumn break.

Irrigators have been busy and Philip was about to bale his third cut in early March. The additional growth of the stand will be fed to sheep.

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