This report has been commissioned by Dairy Australia to provide an independent and timely assessment of grain and hay markets in each dairying region. It should be remembered that actual prices may vary for quality or other reasons

The information in this report is collected and disseminated with due care and attention to its accuracy, but Dairy Australia accepts no liability if, for any reason, the information is inaccurate, incomplete or out of date.

NATIONAL BACKGROUND COMMENTS: Week ending 3rd July 2008

National Summary – Grain

• All world food prices are reflecting the combination of pressures from climate change, lack of water security, higher fuel/fertiliser/chemical prices, a run of poor seasons, and a tendency of a return to protectionism where governments try to contain domestic food inflation by restricting food exports. Whether it is milk, grains, fruits and vegies, they all seem to be higher priced.
• Whilst it is difficult to predict how governments may intervene with food policy shifts (say a review of the US ethanol mandate, return of acres from conservation land programs, as has already occurred in EU in an effort to boost food production, etc), we cannot ignore the underlying fundamentals of supply and demand in the major grains and oilseeds. The table below shows the shifts occurring within grains/oilseeds in the US supply situation. Stocks to Use ratio is a common measure to guage the adequacy of stocks to meet demand. It is a measure of stocks on hand versus the annual usage of that crop.

US: STOCKS TO USE RATIO

• The messages for 2008-9 from the above table are: (1) Wheat looks set to recover to more normal stock levels. In 2007-8, wheat was the runaway price leader as stocks dived to very low levels. One of the major US wheats (known as Soft Red Winter) is now cheaper than corn and is rapidly moving into the feedgrain channels. The same will apply to EU and Black Sea wheats which will replace corn in feed rations. (2) Corn and soybeans look set to stay very tight over 2008-9. We have seen the strength in corn/feedgrain prices over the last few weeks from the cut in US corn production due to their very wet May-June. Protein meal prices are expected to stay very strong until soybean stocks can rebuild. Soybean prices have to rise to a level to “buy” more acres for planting next year, away from corn and wheat. And the world cannot afford to have another crop problem for these crops, or it will lead to another round of price rises.
• Market prices will remain volatile and grain prices are likely to stay strong while the stock levels remain so tight. The market price will ration usage to the point where some consumers have to drop their demand.
• Locally, prices for wheat and barley were up $5-$10 for the week (except for South Australia where wheat prices eased back $10-$15), while sorghum was steady to $5 lower in the north. Triticale, where available, is tracking wheat prices closely.
• Australian crop prospects for 2008-9 improved with WA receiving a useful rain, and a forecast of rain for next week across South Aust, Victoria and NSW, if proved correct, will be very timely to ensure the crop proceeds well over winter and into early spring. The south-west Riverina remains the worst crop region at this point, with very little autumn rain, and many dry-sown crops struggling to emerge.
• Buyers of corn/maize in the north of Australia have the opportunity to look at storing supply as the crop is harvested and prices become more attractive. Unlike sorghum, corn can be directly introduced into dairy rations, whereas sorghum requires some heat treatment to provide access to the starches for dairy cows.
• A new factor in grain pricing is the rising cost of fuel and freight. A number of parties are trying to renegotiate pricing to recoup the higher fuel costs, and clearly this will have to flow through over time while fuel stays at such high levels.
• If you have not secured your supply of grain requirements from June to November (time of the harvest arrival of new crop grain) for this year, it will be a good idea to have that discussion with your supplier. We know that stocks are tight after two consecutive droughts, so leaving your supplies to chance over this period might be a risky position to take. You may need to pay the going price for the next few months, but securing your supply may be just as, or more, important.

National Summary - Hay:

• Activity in northern Victoria and, to a lesser extent, Gippsland in eastern Victoria continues to dominate this market. Prices in these areas have remained strong and interest in buying hay continues. Other hay markets around the country are relatively quiet as good growing conditions in coastal dairy areas and reduced stock numbers limit demand.
• Throughout Victoria there is a lot of discussion on the condition of new season hay crops. While crops in most areas of the traditional grain belt look good, soil moisture is limited (or out of reach of the plant) and more rain is needed to increase confidence in the new season crop. Some buyers are aware they need new crop supplies and unless the supply is ample for spring they will need to consider a carryover of old season hay for next season.
• There is a constant flow of cereal and pasture hay into the Goulburn and Murray Valleys at between $250 and $280. Quality is of secondary importance with recently established pastures providing the energy and hay providing rumen scratch. Buyers now choosing to travel further and pay higher freight costs for cheaper hay and leave sellers of hay seeking $260 to $280/mt behind.
• Growing conditions across South Australia are variable. As a general trend, the traditionally good agricultural areas are looking good, but the more marginal areas are generally in a poorer condition. The market is relatively quiet; however, the Mt Gambier area is showing good demand and drawing hay from Bordertown. Prices around Mt Gambier are about $200 ex farm.
• Northern and central NSW are generally in good condition following good rains over recent weeks. The northern market is tending softer as there is limited demand from dairies as they have good access to pasture and have good storages of fodder. Patches of southern NSW remain dry and lack of emergence has been an issue.
• Southern Queensland has experienced excellent growing conditions over summer and many sheds have been well stocked with summer crop hay of mixed quality. Further north the wet summer made it difficult to make good quality hay in all locations but a great autumn has enabled a large volume of good quality hay to be conserved and stored. Hay demand is low due to the good pasture growing conditions. Owners of hay in north and far north Qld are holding onto stock in the hope that dry and cooler winter conditions will see demand emerge and prices increase.
• In Tasmania the good season continues in the north west dairy areas. As a result, demand from this area is lower. Southern areas are desperately short of feed and have been actively buying hay and straw.
• Indications are than there has been a strong swing to planting crops for grain rather than fodder in many areas, particularly where there are limited domestic selling options for fodder.

There is a separate report on each page for each of the following regions:-

• Far North Queensland, Atherton Tableland, Malanda
• Central Queensland, Rockhampton
• South East Queensland, Beaudesert/Toowoomba
• Northern NSW, Lismore
• Central NSW, Forbes
• South East NSW, Bega
• Riverina, Finley
• Northern Victoria, Shepparton
• Gippsland, Warragul/Sale/Bairnsdale
• Western Victoria, Colac/Warrnambool
• South East South Australia, Mt Gambier
• Central South Australia, Murray Bridge
• Western Australia, Bunbury
• Tasmania, Burnie/Deloraine/Smithton

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• Grazing conditions deteriorating as growth of tropical species slows for the winter.
• Large amounts of standing feed some of it dry, and most farms have supplies of Rhodes grass hay or forage sorghum varieties stored as wrapped silage.
• One important aspect of cow nutrition through the winter will be the supply of protein.
• Not of concern where irrigation is being applied to winter active lucerne and other pasture species.
• Maize harvest continues locally.
• Maize is the clear favourite for dairy cows.
• More energy per dollar than for other grains.
• Some local sorghum available.
• Going to local stockfeed plant at same prices as CQ sorghum delivered to Rockhampton.
• Sorghum may find its way into FNQ dairy pellets.
• But its pricing is based on its value as a chicken and pig feed, and as such, is not price competitive in home dairy mixes.
• Maize prices are up $10 a tonne, but maize is still very competitive in cow feed.
• Maize supply is good while the harvest is on, and prices are relatively cheap.
• Dairy farmers may consider some maize purchasing now and storing it on dairy farms for later use – try plastic sausage storage.
• The region has good whole milk markets on the coast, thus calving occurs all year round to maintain a steady milk supply.
• There is room for production increases to replace New South Wales whole milk tankered north to meet local milk production shortfall.

Hay Commentary

• A characteristically dry week, Local demand from the dairy industry remains low as growing conditions for pastures have been good. The market is very slow and Rhodes grass hay is selling for about $18 per 4’x3’ round bale (8/mt) or about $144 per tonne.
• Excellent hay making conditions over the past 2 months have provided the Tablelands with a good supply of high quality hay particularly Rhodes grass hay.
• Drier weather during autumn has also enabled silage making on dairy farms. With the extended rain periods during summer, there was a portion of lower quality hay made and may still be in store.
• Hay demand has been stable and limited to that from western and northern beef producers seeking their weaner hay. This demand is expected to be maintained as graziers buy hay for weaners during June.
• Lucerne hay stocks are low given the limited hay making opportunities during the wet summer and prices are at a premium. Many sellers are waiting for the winter premiums that often appear in the market.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• Pasture and fodder crop growth now slow.
• But still good feed from irrigation irrigation paddocks which most of the dairy farms rely on for winter.
• Irrigation supplies here not limited, as in southern Australia inland areas,
• Hence opportunities for expansion.
• Cows need high energy grains and extra fodder to maintain winter milk output.
• The local sorghum harvest is continuing as grain moisture levels allow.
• Growers want to avoid the cost of artificial grain drying of sorghum if they can avoid it.
• Best loss of grain moisture comes from frosts.
• Grain quality is still good and in dry conditions this should continue.
• Sorghum prices are steady this week, but an active market is running to accumulate Central Queensland sorghum.
• Wheat and barley prices are also up but very little of these commodities are being used in dairy feed.
• On prices sorghum is the cheapest grain, but sorghum for dairy cows is beat ground finely and also heat treated.
• This tends to direct all but the largest farms to buying manufactured pellets ahead of home crushing or a dairy sorghum mash.
• But there maybe ways of toll milling with the stockfeed plant.

Hay Commentary

• A dry week and demand for hay is slowly emerging.
• The region is characterised by low stocks of hay yet demand is also low at present. Most hay producers have put hay in sheds which has seen hay stocks rebuild from a low base. There are some small stocks of cereal hay remaining from last year’s spring cutting
• Drier weather has enabled some hay and silage making along the coast. Rains during summer have lead to delays in hay making and many paddocks have produced mature and rank hay. High quality hay may prove tough to find in these circumstances.
• There remains limited access to irrigation water for lucerne in the Monto and Biloela areas. Lucerne producers here have managed around 5 cuts this season and normally would manage 7. Final cuts in these areas were silage which is limited to the distance silage can be marketed economically.
• Small bales of prime lucerne are selling for around $12-15 each ($480-$600/mt equivalent) however large square bales are trading between $380 and $450 ex farm in line with the tighter supply. Small bales of grass hay including forage sorghum are selling for around $250-$300/mt.

Notes

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• The dryland paddock feed is now deteriorating.
• Winter irrigation is used sparsely and mainly for winter active lucerne.
• Thus grain is needed for winter milk production.
• Maize is popular winter dairy grain because of its high energy.
• In fact too much energy to be fed to some cows in mid summer, but better in winter.
• Wheat is up $5 a tonne but wheat feeding to cows is limited to farms that contracted 2008 energy needs back at the time of the last wheat harvest.
• FB2 barley is also up $5 a tonne some dairy farmers have the truckers and merchants scouting for any FB1 that comes to attention.
• FB1 is making around $30 a tonne more than FB2.
• Sorghum is the main ingredient of manufactured dairy feeds.
• Region tends to buy manufactured dairy pellets which give farmers access to the cheap energy source, sorghum.
• Home mix dairy farms tend to use the services of local grain merchants for wheat and barley.
• Grain cost savings can be achieved through direct negotiation with grain farmers, but it takes time to find suitable suppliers that can help your requirements.
• Probably best suited to larger farms where the operators are not locked into regular milking sessions.
• There is strong buying for container wheat exports out of Brisbane.
• Sorghum prices are up $10 a tonne.
• Most of the crop is off but a small percentage is still standing in the western Downs.
• Most sorghum is in storage and despite what some traders are claiming, there is plenty of sorghum in farm storage and ample to meet any dairy demand through to October, when new crop wheat and barley will come in.

Hay Commentary

• Buying interest is emerging with another dryer week this week
• Prices are edging up with second grade lucerne in big squares quoted at $400/mt ex farm for dairy buyers. The other end of the spectrum is the prime small square lucerne market which is quoted at around $600/mt for horse markets. In addition to the hay prices listed above, small volumes of cereal hay have been selling for around $250 ex farm.
• Access to large volumes of good quality hay is disappointing this season due to the limited period for hay making during summer. Most lucerne producers only managed 2 or 3 cuts of lucerne without rain and available quality reflects this.
• Hay demand for feeding of dairy cows has improved over recent weeks, but not as much as this time last year which was impacted by the drought further south. The effect of the dairy demand has lessened through this area over recent years as the number of dairy cattle has reduced.
• Weaner demand is expected to emerge shortly as the cattle market remains strong, particularly for weaners. The combination of good seasonal conditions for livestock, reduced stock numbers and a good hay making season means the hay market in this area is very quiet.
• Those who have made hay (lucerne, forage sorghum, millet and Rhodes grass) and stored it are sitting back to see how the season develops before they sell into a potentially soft market. Forage sorghum is quoted at $200/mt ex farm in round bales. Those who normally buy hay have good paddock feed around them and are not in the market to buy in any volume.
• Following successful grain crops some sorghum stubbles have been baled in some areas. Baling of forage sorghum and stubbles continues in some areas.
• Feedlot demand for hay and straw is lower than normal as high grain prices continue to limit the cattle numbers on feed. However there has been some activity with roughage being sought by feedlot buyers on the Downs. Although the general beef cattle demand has been low due to the destocked nature of SE Qld and northern NSW, cattle numbers have been improving recently.
• Buyers have a preference for cereal straw over sorghum stubbles but demand is minimal at present. Sorghum stubble hays are available at $80 to $110 ex farm.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• Wet soils at the start of winter are a good sign of pastures to come.
• The winter active ryegrass has made very good growth – thick feed and up to the height that recovers quickly after being grazed.
• But ryegrass doesn’t have the energy of the summer active grazing and strip grazed fodder crops.
• Increased grain feeding is suggested by most nutritionists, to maintain milk production through the winter months.
• Not only to maintain milk production but also to maintain body conditions at time of next joining.
• Most farms in this region calve all year round to aim for constant monthly milk production.
• Feeding must be geared to match the planned milk production.
• Local maize can be purchased for $375 delivered but we have included a traders’ margin in our table.
• Local storage is limited so expect price to rise when the harvest is over, in mid August.
• Corn is the cheapest energy source.
• Farmers may consider buying excess maize now and storing it on dairy farms in temporary plastic storage till wanted for cows.
• There have been some good technology developments in temporary plastic grain storage over the past two years.
• Grain purchasing at this time, if not already completed, is a choice between barley sorghum and maize, with maize in the lead.
• Once local corn or maize is not available, then sorghum will be the cheapest grain.
• And it will carry a $40 to $50 road freight component.
• On past experience many farmers will pay the premium for feed barley.
• Year on year milk production was down four percent at the end of April.
• This makes it the best performing dairy area within New South Wales.

Hay Commentary

• A couple of dry weeks for those on the Liverpool Plains which has given hay producers a chance to complete winter sowing. The season is generally too late for sowing oats. Conditions have been mild and without frosts, active stands of lucerne make weed control difficult.
• The favourable season means that pastures continue to look good and demand for conserved fodder remain relatively low.
• Small volumes of better quality, shedded cereal hay has been selling for $250-$280 ex farm around the Liverpool Plains. Good quality lucerne (cow) hay has been selling for up to $300.
• Chaffing quality hay has been selling for around $360 per tonne for the best quality. Some owners of hay are holding back from selling at these levels saying the price is not high enough.
• Demand from the dairy sector has been light; however, with higher milk prices forecast for the foreseeable future, hay producers are hoping dairy farmers will be feeding their cows more heavily this year and increase demand. This does not appear to be the case at this point in the season.
• Demand for fodder through the north coast continues to be limited as the season’s conditions have resulted in good volumes of on-farm conserved fodder and good pasture growth. The mild weather is also helping feed production as frost have not been prevalent as yet.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• This region had a late start to winter.
• Minimum standing dry feed from spring.
• And very little winter feed.
• Rain in June has only just germinated pastures and feed is short.
• It needs to be made up with fodder and hay is being trucked up from Victoria.
• Grain and hay are being used to convert to milk.
• Farmers have few alternatives with no water for summer irrigations, therefore no summer dairy fodder crops and similarly no local maize grown without the water.
• But farmers have done their sums, and on current milk prices and grain and fodder prices, they can make money.
• Wheat prices are up $5 a tonne this week led by some of the larger traders using 1^st July to add on a storage cost component.
• When buying directly from growers this should not apply, or should be capable of being negotiated around.
• Feed barley prices are down $10 a tonne.
• There is a local shortage, but at the tabled prices South Australia barley can be moved in the region.
• South Australian barley is FB1 as is the Forbes and Central West feed barley, but not the barley from north west and northern NSW.
• With the sorghum harvest in NSW and southern Qld complete in practical terms, there is a case for a price increase based on storage costs.
• But more trucks are now available and looking for work.
• This factor is over riding the “out of grain storage”” despite higher diesel prices.
• Farmers aim for year round steady milk productions so feeding programs need to match with individual cows and their positions in the lactation cycle.
• Maize prices are low while coastal crops are being harvested and product is available off the header from inland irrigation farms.
• Regional winter grain prospects have been greatly improved by the mid June rains.

Hay Commentary

• This area looking much improved following rains in late June which has assisted crops already planted and given the opportunity to plant more. Generally however crops destined for the hay market are struggling as growing season rainfall is around 50% of average.
• The hay market through this area is very quiet. Most activity relates to lucerne hay with a strong focus on supplying the equine industry.
• De-stocking on farms and limited restocking in feedlots through the dry times mean local demand for hay is limited and, as such, hay there has been little hay trading.
• Some prime quality small square bale lucerne has been selling for up to $520/mt ($13 per bale) and lower quality, or second grade, for about $400/mt ($10 per bale). Large square bales of lucerne have been selling for in the range of $350-$380 for high quality milking hay, but not race horse, quality.
• In the northern parts of this region there has been some access to summer crops stubbles and hay such as forage sorghum and stubbles. These roughage sources are not finding buyers easily as yet but will be valuable later in winter.
• Many grain growers who made hay this season were not as well geared up to store hay. As such hay has been paddock-stacked without cover and a reasonable volume has been damaged by summer rains. This means the quality of hay for sale is variable and buyers should get feed tests for any hay being purchased and they should agree on a price based on the feed test results.
• The many fires in hay this season has created an expectation that insurance cover may be either difficult to get or expensive in future.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• This region had no rain through May, then an inch in early June and nothing since.
• But despite this low rain over two months winter pastures look fresh.
• They contrast with the now dry standing summer fodder crops.
• Whether they have been grazed by cows, or are still being held in reserve, they don’t look much but are an important fibre source.
• Feed tends to be winter ryegrass for the night feed and a long walk to daytime grazing of standing dry maize or forage sorghum crop.
• Grain prices are mostly steady.
• Wheat is up, but unless priced in late 2007, it is priced out of usage in south coast coastal dairy farms.
• Barley and sorghum are the main contenders for new grain purchases.
• Sorghum is the main energy ingredient in manufactured dairy pellets feeds now, and this is likely to persist till October or November.
• NSW sorghum harvest is finished for all practical purposes.
• Trucks are now a lot easier to obtain, especially for long hauls.
• This is keeping the sorghum price steady, despite increased fuel prices.
• If dairy farmers want to use barley, South Australia is presenting now as good a source as anywhere.
• High grain prices should also stimulate some barley, wheat or triticale production on the Monaro or the coastal plain.
• The wheat and barley qualities (energy) expected would be suitable for use of dairy cows

Hay Commentary

• Bega dairy farmers are now focusing more on their roughage needs for winter. The late break has meant that annual grasses were sown late and pasture production has accordingly been reduced. The plentiful silage production of last year is wearing down as more pits are opened and emptied.
• Even though Bega dairy farmers are able to manage rations well with the feeding of pasture / silage and grain only, hay will be needed this winter.
• The hay market here has improved in the past month and more hay is moving. The stocks of paddock stored hay are declining. Buyers looking for good volumes of better quality hay will need to pay around $200-250 ex farm. Some sellers are eager and prepared to sell lower quality hay for $175 ex farm or less and with freight around $100 to Bega Valley prices are similar to those of Goulburn Valley dairy farmers.
• Some hay buyers with a low requirement for quality have been buying low quality cereal and canola hay from the Riverina. Canola hay is being used on farms with access to feed mixer wagons so the cows cannot avoid the less palatable components of late cut canola hay. Straw is not cost competitive in the Valley.
• For updates on inland hay, please refer to the Riverina and Central West NSW reports, where much of the hay for this area is source
• The many fires in hay this season has created an expectation that insurance cover may be either difficult to get or expensive in future.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• This area has now had just enough rain to sow crops.
• Growers have taken the sowing option, even at high risk of crop failure, because livestock numbers are so low.
• Crops have mostly germinated except for barley crop sown at the end of June.
• There is a cover of green on pasture paddocks whether recently sown or just germinated from the seed bank.
• But as in many dairy areas, the feed is thin and can’t stand much grazing.
• Dairy farmers continue to produce milk on grain and hay.
• Local grain supplies appear to have gone.
• There may be grain in silos but it is spoken for.
• Wheat is up $10 a tonne this week as some traders use the new financial year to apply a storage loading and to try to work the now deregulated export bulk wheat market.
• It should not mean anything to dairy farmers as they are using barley.
• The barley price is steady.
• Supplies of local barley are lower than wheat.
• But Victorian merchants can’t raise the price because there is good quality barley ready to come into the area if local merchants seek and increase.
• Fuel prices are higher, but there are more trucks available now, and the freight competition is keeping feed barley prices down.
• The strip of rain shadow now extends from Balranald and Deniliquin.
• East of the Newell Highway crop prospects are better.
• Triticale is in short supply and priced for the enthusiast market.
• Corn is very expensive and more useful to chicken meat producers.

Hay Commentary

• No significant rain through the region this week, and while some crops freshen after 3 mm, they have nothing under them they are also looking for rain. Some crops planted into paddocks with good subsoil moisture have not had enough rain for the roots to get to the lower moisture. Good rain on these crops could see the roots get to the moisture and benefit accordingly.
• Conditions of the new crop are starting to have an impact on the market. Buyers are aware they need new crop supplies and unless the supply is ample for spring they will need to consider a carryover of old season hay for next season.
• Hay buying and logistic activity continues strongly and prices are strong but steady. Local wheaten hay has sold for around $220 per tonne and very good quality oaten hay has received up to $250 per tonne; however, most parcels seem to be selling at around the $220-$230 level. Parcels of cereal hay are available for $200 on farm but these tend to be of lower quality.
• Buyers now need to travel further and pay higher freight costs for hay. While the quoted range of prices above is not moving much, the fright to farm is steadily increasing.
• In the Goulburn Valley Good quality cereal hay is still being sold into the Goulburn Valley for around $250-$280 delivered farm, but good quality feed tested hay with MEs of around 11.5 – 12 have been receiving a good premium to this.
• As a result of the higher buying activity, on farm stocks are reducing. Some producers estimate there is less than 20 per cent of the harvested hay crop to be sold. A sign of strong demand is that a number of stacks have been sold as one parcel rather than by the truck load. Most hay sold is either destined to the Goulburn Valley or local dairy markets. This is different to traditional years when hay tends to move further north and east.
• Buying activity of canola hay remains tentative. The quality of the canola hay available this season varies significantly and, as such, the confidence to buy canola hay is lower. This is in contrast to last season where the quality of canola hay was generally higher and more consistent. There is a slight increase in the volumes of canola hay now being sold with the market at around the $230-$240 delivered Goulburn Valley for good quality hay (14% protein, 9.5ME)
• There has been recent small demand for straw which is currently priced between $140-160 delivered farm. With reduced harvesting of grain crops last year it is expected that there will be less straw from the immediate area available for sale.
• New crop cereal crops are in but there has been a big swing away from hay crops.
• Small volumes of good quality irrigated clover and rye hay have sold for around $350-$380 per tonne, but hay of this type has limited availability as relied on irrigation for production.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• Watered paddocks are now carrying good dairy feed.
• Enough to stand heavy grazing but with the cold weather, slow to recover.
• Dryland pastures are making very slow progress and can’t be used much in the grazing rotations.
• Pastures topdressed with nitrogen are doing better.
• But dairy farmers need to produce milk on grain and fodder.
• Dry cows are usually sent off farms to dry areas, but unless those dry areas are in southern Victoria, or the north east, beyond Wangaratta, the dry farms aren’t producing enough feed for the dry cows.
• Yearling stock may get by with just the addition of hay but for cows about to calve farmers have been concerned about condition.
• Most are finding ways to feed one or two kilograms of grain a day with the hay.
• Some call it pre feeding.
• Because it is difficult to meter out grain when not feeding it in the bail, wastage is high.
• Some farmers are using oats for this purpose.
• Wheat is up $10 a tonne, but unless farmers have pre booked wheat, it is too expensive for use on cows.
• A large parcel of wheat was sold by a central Victorian processor back into the trade last week.
• There are many interpretations put on this action.
• Paddock conditions are not as good as they were at this time last year either for cropping or dairy production.
• Supplies of local barley are lower than wheat.
• But Victorian merchants can’t raise the price because there is good quality barley ready to come into the area if local merchants seek and increase.
• Fuel prices are higher, but there are more trucks available now, and the freight
• Best supplies are in South Australia.
• Victorian incoming crop prospects and those for South Australia are making growers strong sellers.
• There are genuine concerns for crops when the weather warms up in spring, unless a lot more rain falls.

Hay Commentary

• New season crops are freshened with 3 or 4 mm of rainfall but crops are looking for rain. Some crops planted into paddocks with good subsoil moisture have not had enough rain for the roots to get to the lower moisture. Good rain on these crops could see the roots get to the moisture and benefit accordingly.
• The condition of new season’s crop hay crops are starting to have an impact on the market. Buyers are aware they need new crop supplies and unless the supply is ample for spring they will need to consider a carryover of old season hay for next season. As a result of the higher buying activity, on farm stocks are reducing.
• Quality is of secondary importance with recently established pastures providing the energy and hay providing rumen scratch. Buyers now choosing to travel further and pay higher freight costs for hay. It’s a standoff with close in sellers who are asking for $260 to $280 ex farm for cereal hay (plus $40 freight) and the buyers who want to achieve a delivered price of $280. Purchases are being made from the likes of the Pyrenees and Horsham areas. Pasture hay at $200/mt plus $60 freight gets a palatable delivered price of $260. While the quoted range of prices above is not moving much, the fright to farm is steadily increasing. Some buying pressure is low at present as herds are drying off.
• Good quality cereal hay is still being sold into the Goulbourn Valley for around $260-$280 delivered farm, but good quality feed tested hay with MEs of around 11.5 – 12 have been receiving a good premium to this.
• Buying activity of canola hay remains tentative. The quality of the canola hay available this season varies significantly and, as such, the confidence to buy canola hay is lower. This is in contrast to last season where the quality of canola hay was generally higher and more consistent. There is a slight increase in the volumes of canola hay now being sold with the market at around the $230-$240 delivered for good quality hay (14% protein, 9.5ME)
• Small volumes of good quality pasture hay from western Victoria have been moving into the area; however, higher fuel prices could limit future movements. The better quality pasture hay from the WD has been selling for around $160-180 ex farm.
• Local lucerne hay is limited in availability; however, there dairy farms appear to be comfortable getting buy without lucerne hay. Top quality lucerne hay is fetching around $400 ex farm, but most of this is going to chaffers and the horse industry.
• There has been recent small demand for straw which is currently priced between $140-160 delivered farm. With reduced harvesting of grain crops last year it is expected that there will be less straw from the immediate area available for sale. Some vetch hay is available for between $360 and $400 delivered, but very little is trading.
• Many dairy farmers continue to focus on price alone for hay without considering the implications of using cheaper, lower quality hay.
• Given that much of the lower quality hay being sold into this area has been stored in the paddock, buyers should have hay tested for quality and payment made on the basis of the test results; ideally buyers should also view the hay.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

.Grains Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• Good pasture growing conditions now in place for west and South Gippsland.
• Pastures now receiving five to ten millimetres of rain each week.
• This is enough for winter growth and there are some advantages in having the topsoil wet but not above field capacity or waterlogged.
• Nevertheless farmers are wary of spring prospects when the dry soil in within a foot of the surface.
• East Gippsland is still dragging the chain compared to the rest of Gippsland.
• Grain usage is mainly barley.
• But a number of larger dairy framers forward contracted wheat around last harvest.
• Some even bought wheat out of the AWB wheat tender arrangements, when it was working.
• Farmers using dairy pellets are relying on the sorghum content for the energy.
• Sorghum is again being offered into the region, but it hasn’t much appeal for home mixing because it needs extensive treatment to release its energy to cows.
• Wheat is up $10 a tonne this week.
• Sellers are aiming it at the container export wheat trade and the now deregulated bulk wheat export buyers.
• Nearly 40 per cent of Gippsland dairy farms are worked by the owners.
• This makes it difficult to run dry stock on other farms and to arrange for grain and hay supplies from best sources.
• Grain usage is being increased per cow.
• More energy is used by cows in winter.
• But with some cows late in their lactation farm grain usage is not at its peak.
• And price incentives by way of new season milk prices and anticipated stepups through the next year, are allowing for some planning.
• But increasing cow numbers will take time.
• This week the price of barley is steady – kept down by offers of FB1 barley from South Australia.
• South Australia feed barley is brighter than the normal feed barley out of the Western District.
• It isn’t necessarily any better for cow feeding but it has better eye appeal.
• Triticale is up $10 a tonne following wheat.

Hay Commentary

• Rains continue to bless west and south Gippsland. These are great for recently sown pastures, however, areas more to the east are looking for rain and demand for fodder has increased as a result.
• Hay buying and movement are increasing. Reducing local stocks of on-farm fodder and some dry areas through Gippsland have increased demand.
• Most of the hay moving into the area is cereal hay from Pyrenees and Horsham area. These areas have also seen increased demand from the Goulburn Valley which means on farm prices are tending stronger. In addition, higher fuel prices mean the cost of transporting hay is also increasing. Price for hay into parts of east Gippsland are understood to be up to $300 per tonne for good quality cereal hay.
• Small volumes of lucerne hay have been sold into east Gippsland for over $400 per tonne; however, supplies of lucerne from this area are limited. Local lucerne is understood to be trading at similar delivered values.
• Some pasture hay from western Victoria is making its way into Gippsland. Prices in western Victoria have firmed slightly as a lot of the lower quality hay has been sold and the hay remaining is tending to be of higher quality. The western Victorian market is relatively quiet, but prices are remaining strong with good quality pasture hay selling for around $160-180 ex farm.
• Many dairy farms have finished direct drilling of annual pastures, with contractors saying they have never been busier.
• While there are still good volumes of canola hay available, it is not really trading as dairy farmers show a preference for alternatives. As such, the prices quoted above are nominal. However, interest in canola hay appears to be getting stronger in Goulburn Valley, but the large variation in quality of canola hay seems to be holding buyers back.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• The dairy areas have had good pasture growing conditions for two months.
• And the pastures now have some substance in them.
• Grazing rotations are working with the so far warmish weather helping paddocks to recover after a few grazing sessions.
• Light rain has been enough for current pasture needs.
• Farmers would like more rain to fill dams and to wet soils deeper and thus to give more security for the spring.
• There was the chance of a rain this week from Western Australia, but it slipped down into Bass Strait and Tasmania.
• Wheat prices up this week but not relevant to all dairy farmers, as some have switched to barley.
• Red wheat is not quite making the same price as standard wheat. It isn’t because it lacks anything in feed value to cows: it is just that the competition is different.
• Red wheat has no appeal to container wheat exporters and domestic flour millers.
• Feed barley from Western District sources is performing well. But more barley from South Australia is being offered. It is brighter than Western District barley and has good eye appeal.
• It is being sold on superior protein levels. But how important is grain protein at this time of year while cows are grazing quality green grass pastures?
• The feed barley price from both sources is steady.
• The high cost of fuel encourages the use of local grain.
• This region is fortunate in having stored grain from last season within the region.
• New season crop prospects are good with most crops sown and established enough to withstand the high winds earlier this week.
• There is plenty of local storage operated by Western District grain merchants.
• Western District dairy farms have lower freight on barley purchases than other Victorian dairy regions.
• Triticale is not grown in the region - prices are following wheat and need to carry a freight component.

Hay Commentary

• Coastal areas again received good falls over the past keeping dairy buyers in these areas quiet on the hay demand.
• There remains good volumes of hay on farm and very little is moving. local, Gippsland and Goulburn Valley demand are maintaining this market.
• Demand and trading activity are picking up and prices for pasture hay have firmed slightly. There is less low quality hay left for sale, so more of the pasture hay being sold is of higher quality. Ex farm prices for good to excellent quality hay range from $160 - $190, with low quality hay fetching down to $150.
• Some Western District pasture hay has been sold into Goulburn Valley at around $230-$240 per tonne delivered, but higher fuel prices could see sales into this area reduce. Having said this, on-farm hay availability through the Goulburn Valley area is reducing and buyers and consumers are starting to travel further to buy hay. Hay trucks are now moving hay from the Pyrenees and the southern and eastern Mallee up into the Goulburn Valley.
• High quality vetch hay is available on Mallee farms but sellers are looking for between $360 and $390 ex farm. Sellers expect the market to reach this level during winter
• Interest in pasture hay from northern buyers is also limited as most dairies are focusing on buying higher quality cereal hay.
• Quality of the pasture hay from this area has tended to be mixed with low energy levels noticed in much of the grass hay this season. Whether or not hay is of good quality will be impacted on by its storage, that is, if the hay has been stored outside it is likely to be of lower quality.
• Paddock stacks are now more likely to be straw as hay stored outside has in-the-main been sold.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• This area is one of the best dairy areas of southern Australia.
• Things are going beautifully.
• Good winter growth continuing and a good body of saved autumn feed from irrigations.
• Natural rainfall pastures are doing well despite low winter rainfall.
• Missed opportunity for a good rain this week when the front missed most of the south east and headed for Tasmania.
• Farmers making milk out of a combination of grain and pastures couple with selective use of silage and hay.
• Most farms are able to produce milk profitably at current barley and milk prices.
• And with some bonus payments from step ups later in the year.
• Wheat prices are out of reach to dairy farmers for new purchases.
• But they have come back $20 a tonne this week in Adelaide and this should translate to $10 less locally.
• Main reason seems to be assessments that old stock wheat stocks are higher than barley, but not high enough to attract bulk wheat exporters under the deregulated bulk wheat market that started this week.
• Feed barley prices up $5 a tonne.
• A good high energy reasonable grain protein commodity, safe for cow feeding.
• South Australian barley expected to move to domestic markets in Victoria and southern NSW for second half of this year.
• Oats and lupins steady.
• Triticale supplies tight.
• This area preparing for an expansion, but growth in cow numbers will take place gradually and probably over three years.
• Cows are too expensive to buy in at current prices and breeding takes time.
• South Australian incoming crop prospects deteriorated through June. Still need a solid rain.

Hay Commentary

• Despite good pasture growing conditions through the area, demand for fodder is strong through this area. Prices are tending firmer with one hay trader being told he will need to ‘sharpen his pencil’ if he wants to buy hay off farm.
• There has been an increase in phone enquiry through the area and hay is understood to be moving from Penola, Naracoorte and Bordertown into the Mt Gambier area. Prices are understood to be in the area of $200 per tonne ex farm.
• Lucerne from the Naracoorte and Bordertown area is now finding more buyers for eastern markets.
• Dairy buyers continue to show a preference for cereal hay as it has a narrower range of quality compared to pasture hay. This narrow range of quality and greater predictability enables more accurate balance of nutrients in the rations. Lucerne price through the area remains steady at around $300-$350 per tonne.
• The most common roughage on the market is straw. It has been difficult to move straw but interest is increasing and straw is now selling for about $85 per tonne ex farm. This will be a useful source of roughage during winter.
• Pasture hay remains stored on farm, and tonnage is starting to clear stocks. The market for this hay is around $150-$180
• Particularly strong prices for canola and wheat (grain) are threatening the sown area of new crop hay and could see a reduction in hay availability in the new season.
• Quality of hay stocks is variable. With rains during hay making, the ratio of damaged and good quality hay is estimated to be about 50:50.

Notes:

Grain prices are a delivered price into a region.
# Hay prices are ex-grower farm – delivery / freight rates must be added.

Grain Commentary

• N.B. The above prices reflect the current “spot” market for grain from grain farm to dairy farm.
• Murray Bridge dryland pastures are coming through but won’t provide cow grazing for some time.
• Rain this week only six millimetres.
• Farmers were wanted ten times this amount.
• Grain growers have sown crops and they are emerging.
• But local crops were affected by strong winds this week - some areas of paddocks will need resowing.
• Dairy farmers are still milking cows on grain and fodder with a low contribution coming from grass.
• Wheat prices down sharply this week on trade reviews of stocks held.
• This price drop won’t be offered to dairy farmers but is there to be negotiated.
• However for most farms wheat is still too expensive for cows, but price direction is encouraging.
• Feed barley prices are up $5 a tonne with SA supplies going to be needed for livestock in Victoria and lower NSW.
• Early cereal and pasture growth not as good as last year and last year the season cut out early.
• Growers are now very careful grain sellers.
• Feed barley is popular with growers in this region and in outer Adelaide areas.
• These regions are having difficulty in expanding in size without relocating.
• Life style farm buyers have taken land prices too high for commercial dairy farms.
• Smaller dairy farms tend to use manufactured pellets, with input prices for raw materials lower than the prompt cash prices for wheat and barley.
• Oats are steady.
• Lupin prices are steady and provide a benefit to cows, not only through adding protein where grass is in short supply, but also in providing cost effective energy.

Hay Commentary

• Variable rain falls during the last week have been useful, but growers through this area are still looking for more rain.
• Old crop domestic hay markets remain relatively quite with very little activity. Exporters are offering in the order of $200 delivered plant, but this is for premium quality only. With next year’s prices of $200 delivered plant for premium export quality hay being available in South Australia exporters are try to encourage hay production over grain production.
• Lucerne from the Naracoorte and Bordertown area is now finding more buyers for eastern markets.
• There has been some demand from stock feeders in the north, but this is limited.
• It is uncertain whether the stronger market activity in northern and eastern Victoria and south east South Australia will have an impact on demand and prices this area. Hay from the southern Mallee is starting to move to Goulburn Valley and Gippsland. Demand around Mt Gambier has also increased and prices have started to firm.
• There are large stocks of straw that remain uncommitted. It is likely that this straw will move when stocks of other better quality hay is removed from the market in mid winter. Straw has been trading between $85 and $115 delivered depending on end use or quality ($85 for pellet grade, $90-$95 for chopped straw and $110-$115 for bedding straw); however, this market has also been quiet.