Australian fodder producers are expecting markedly better demand for silage, hay and straw than was anticipated at the beginning of the winter cropping season as domestic demand, spurred by El Nino inspired dry conditions, exceeds expectations.
There are also positives on the export fodder front, with China announcing its plans to reopen its doors to Australian fodder exports by allowing the renewal of export permits which had been stalled over the past two years, creating an effective trade barrier.
Australian Fodder Industry Association (AFIA) chief executive Paula Fitzgerald said there was cautious optimism among the industry, but warned matters were not set in stone on either the domestic or export front.
"We welcome the news from China, it is a fantastic starting point, the permits have all been reissued but these things take time to get moving practically so we're certainly not expecting fodder heading to China in the short-term," she said.
Domestically, Ms Fitzgerald said the industry was aware of speculation there would be solid demand from northern livestock producers given the dry season there but she said a number of factors meant that was far from a given.
"We have low livestock prices compared to the last drought so that may mean producers are unwilling to continue to feed and may look to destock earlier."
"There has also been some rain this week which may benefit grain crops in eastern Victoria and southern NSW so that could see those feeding livestock turn to grain rather than fodder.
"We're seeing the fodder season really get underway so we'll have a much clearer idea of supply and demand in a month's time."
Feed Central managing director Tim Ford was more upbeat about fodder prospects, encouraging farmers to make hay now to meet demand.
Mr Ford said his business was predicting strong demand for hay and straw throughout the 2024 financial year as buyers cope with dry El Nino conditions, while he said international markets also presented opportunities.
"The export market has opened with high prices and these are expected to remain strong across the season," he said.
This represents somewhat of a turnaround from fodder prospects earlier in the season.
"When we released our Tips for Profitable Hay for the Season booklet, we were conservative with our predictions, but the market has opened much stronger than we expected after the El Nino announcement and because it's already really dry in a lot of places."
Mr Ford cautioned supplies may be lower than some estimate, pointing to unusually strong neighbour-to-neighbour private trade that had removed a lot of product from the system.
"Things like chickpea and canola hay have been selling neighbour-to-neighbour which is unusual early in a drought cycle."
"We believe that is a bit premature because the market is able to supply high-quality product without resorting to those types of alternatives."
With cereal crops rapidly entering the optimum phase for cutting Mr Ford said farmers contemplating cutting moisture stressed paddocks should not delay.
"If a supplier has a stressed wheat or barley crop because of a frost or it's getting dry and they're thinking about its viability, don't hesitate with making hay.
There was some positive news for fodder consumers, however, with Mr Ford saying there was a reasonable stockpile of lower quality hay from last year's flood impacted season remaining.
He said there would be sufficient supply for buyers.
"There's no need to panic and buy whatever is offered; you're still able to source good quality hay," he said.
Currently he said cereal hay prices in southern Australia, expected to be the main supplier of fodder this season, opening at around $250-$350 a tonne for cereal hay.
Mr Ford said there was further upside from that figure.
"That's a very strong price guidance from the exporters that will set the tone so I think cereal hay and wheat and barley are going to be strong $200s maybe $300s going forward."
Gregor Heard
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
