The market is a bitch

Extracted from the Farm Tender weekly Newsletter - Sign up and get the email every Wednesday morning before 5 am. www.farmtender.com.au

By Dwain Duxson

Good to be back after a couple of weeks off-grid gathering thoughts and reading.

The Hay market is so important from a domestic and export point of view. This new season will see supplies at levels not seen for a decade or beyond. Low supply, that is, and it's all come along in the greenest spring for some time.

We cover it briefly in our latest Hay Report here.

What is arguably the Hay bowl of Eastern Australia, the Wimmera and Mallee regions of Vic, and the Mid North and Mallee regions of SA aren't making much Hay this season for a wide range of reasons.

See one of the rare Wimmera Vetch Crops cut in the picture above.

The estimations are, that we will do about 10 percent of the Hay we did last year.

That's why the domestic Hay market is a bitch. It's a hand-to-mouth industry. On the main, buyers only buy when they have to. For periods, there is no market, so you just can't offload stock at a price, unlike the Grain market. That low demand has never been captured better in the period from March 2020 until now, when green grass has been plentiful, and demand has been low, I'm talking really low.

But we all know things change quickly, and we all know that we are closer to the next dry period. It's a given. But let's not hope it's 2023, and let's not hope it's not until we rebuild the Hay stockpile.

But Farmers have a knack for finding a way, and if it stays green, then the problem is reduced. But if it doesn't, there will be alternatives, and Feed Grains will fill much of the void. Also, with a moisture bank, it's an opportunity for Summer Crops. Lucerne plants will have their feet in plenty of moisture, so it should be a thriving Crop this summer. Some Farmers might make use of 2nd growth in Crops, and there will be plenty of Straw around. So all is not lost.

It's interesting to compare the domestic Grain and Hay markets. For any time on any day, there is a price for Grain. You can pretty much offload Grain and take the market price. As I mentioned above, the Hay market is hand-to-mouth. At times there is no price because there is no demand.

We have had times of low Grain supplies in the past, and to fulfil demand, we have used Rail from other areas like WA to East or vice versa. We have even imported Grain on Ships. But importing Hay, no, or even getting Hay from the West, no and has anyone heard of a Hay Train, no.

Many Farmers will lose a bit of confidence in Growing Hay, mainly due to the fact Hay takes a long time to cure and many things can go wrong in that curing period.

So we need to find new techniques, and I know there is a group using a US system that dramatically reduces the curing time. It's worked in small trials, but that is yet to be proven in numbers. Perhaps we need to gear up for more silage.

Still, the Hay market is as important to the Grain Growing industry as ever, not this year when things are flush but in years when the Springs don't finish, and the only alternative is Hay it keeps them afloat. Also, weed resistance is a growing problem, and Hay can break that cycle somewhat. In times of drought, stored Hay is very valuable and lucrative for the seller.

It's such a complex market of twists and turns, and each season is different.

Just like this one...

End of message