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What has happened to the hay market? Major shortage puts squeeze on farmers

By Angus Verley and Jessica Black, Wednesday July 11, 2018 - 06:32 EST
ABC licensed image
Drought-stricken NSW is taking all the hay it can get from other parts of the country. - ABC licensed

Drought-stricken farmers in New South Wales are being forced to buy poor quality hay as a major shortage hits south-east Australia.



Price and quality have become secondary considerations for desperate farmers and the usual haggling has gone out the window.

In a stark demonstration of the boom and bust nature of the hay market, it was only a few months ago that many producers were looking at their vast hay stacks from the bumper 2016 season and wondering whether they would ever find buyers.

Now hay sellers are receiving a regular stream of text messages and calls from farmers and brokers in search of feed.

From worthless to gold-plated

Sam Shields, a farmer at Douglas in Western Victoria, sold his last bale of hay last week.

"The last bit was just some clover straw from 2016 that had been stacked outside and we didn't expect to have any interest at all. In fact we probably thought we'd have to burn the stuff," Mr Shields said.

"It's just a shame it's so dry further north and the poor old dairy cocky that's not making a lot that's having to cough it up, that's probably the bad part of the story."



Luke Hallam, who farms at Hopetoun in the Victorian Mallee, produced 2,500 bales of vetch hay in 2016. The massive stack sat there for almost 18 months and he wondered what would become of it.



"We couldn't give it away up until about three months ago," he said.

That all changed when the calls started to come in from northern NSW and from the fire-affected regions of south-west Victoria.

"Up to north of Broken Hill and up to Tibooburra I've sold loads to and then down Colac way, so it's been travelling far and wide," he said.

"Fellas up north have been ringing and they're buying it by the road train. One fella up there's feeding out 110 bales a week, so a road train doesn't last very long."

Need for feed

Disaster relief charity Need for Feed usually relies on donated hay for farmers in need, but in recent times has been forced to buy fodder.

But Western Victoria coordinator Adam Meek said it had become almost impossible to buy hay at a reasonable price.

"Six months ago people couldn't give it away and now it's basically gold-plated, the amount of money that they're asking," he said.

"When you ring up the people to buy the hay, if you don't lock it in on the spot, there'll be another person in five minutes ring up and they'll take it straight out from under you."

Mr Meek said he was concerned the hay market would grind to a halt within weeks.

"A few fellas I've spoken to recently, they seem to think within the next six to seven weeks there's going to be no hay for sale in Victoria," he said.



Mr Meek said Need for Feed had started sourcing alternative feed, such as grape marc which is a by-product of the wine-making process.

"We have to be thinking two or three months ahead from where we are now so when the proverbial does hit the fan, we're all ready to go and jump on it."

Short supply creating desperation

Australian Fodder Industry Association chief executive John McKew said the hay shortage was forcing farmers to buy hay that they normally wouldn't look twice at.

"People are so desperate to secure any sort of feed they can that they have been purchasing less than optimal hay," he said.

Despite the ultra-competitive market, Mr McKew said he believed most sellers were behaving ethically and not taking advantage of farmers.

"I have spoken to a lot of hay growers and they have been very open and have said, 'look we've got some hay here, the quality isn't great' and buyers have been saying 'put it on the truck, we'll take it'."



Hay brokers report record low levels

Cieran Maxwell, the general manager of hay broker Feed Central, said the company had very little hay listed for sale.

"There's no doubt our supply is certainly at one of the lowest points we've ever seen," Mr Maxwell said.

"You may be paying an a grade price for a b-grade product and really that comes down to supply and demand."

Mr Maxwell said many hay producers were holding onto hay reserves for their own stock, but that would change if decent rain fell.

"What you will find is that as small amounts of rain come through different regions, we'll start to see some hay probably come back on the market," he said.

"If you've got hay and you're considering moving it, I'd be moving it in the market right now, instead of waiting any longer."


- ABC

© ABC 2018

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