Dry conditions around the country are seeing fodder prices rise by up to 40 per cent as livestock and dairy farmers prepare for winter.
Parts of Victoria, South Australia and southern Queensland are seeing the biggest shortages with some regions having less than half feed they had last year.
Caitlin Schofield, from the Australian Fodder Industry Association, says many farmers are holding on to feed as they prepare for drought conditions.
"Cereal hay is a real concern", she said.
"This year, with peak demand from the export market as well as lower yielding crops last year, buyers are actually out there in the market seeking that lower grade, lower priced product.
"Last year, there was a little bit of carry-over, but this year very limited stock's available and it's the same with straw."
© ABC 2013
12:01 EST Wool grower, John Ive smiles as he gazes out at the gently rolling hills on his farm.