This week, Jon Paul Driver catches up with National Sales Manager, Dave Clothier, for a market update, discussing current trends in the hay market. Although there remains a significant volume of hay on the market, much of the product is currently only available in smaller lots. All grades of hay, including weather-damaged products from last season, are selling quickly – a positive sign as we head into a new season. Nationally, hay prices are stable but are rising for quality cereal and vetch lines due to strong demand. This healthy demand is setting the stage for what could be a very promising new season.
Episode Highlights:
- Recent rainfall across the eastern seaboard has had minimal impact on reducing fodder demand.
- The EOFY is influencing decision making. Some growers are choosing to defer payments and buyers are deciding between filling on-farm storage now or in the new financial year.
- Demand is high and driven from the south, spreading into the north; all grades are selling well which bodes well for the new season.
- Beef prices are expected to remain strong for the next few years, supported by exceptional seasons and high livestock numbers in QLD, NT, and NSW. High calving and weaning rates are expected to continue boosting supply on the eastern seaboard.
- In WA, dry conditions are leading to increased livestock movement to eastern graziers and into abattoirs.
- While there is still a significant volume of hay available, it is distributed in smaller lots, making it challenging to secure large quantities. All grades are available, but larger lines of quality hay are scarce.
- The rapid sale of all hay grades, including weather-damaged stock, is setting the industry up for a promising new season. Unlike last year, when quality hay was left on pads due to limited shed space and faced higher risks, the current situation looks much more favourable for the upcoming season.
- Across the board, hay prices are firm, except for quality cereal grades where prices are rising due to demand.
Jon Paul Driver 0:05
Welcome to the Feed Central Hay Matters podcast. I’m your host Jon Paul Driver. Today I’m joined again by Dave Clothier. Dave’s the National Sales Manager for Feed Central, a market guru who’s gonna give us an update. Thanks.
Dave Clothier 0:17
JP, great to be on board again, on this very cold Southeast Queensland morning, some big frosts around this neck of the woods.
Jon Paul Driver 0:26
I’m not sure I have a lot of sympathy for your minus two. I’m not far from the Canadian border. And this year, we saw minus 26. And it doesn’t matter whether we’re talking Fahrenheit or Celsius. So let’s just get on to the market update.
Dave Clothier 0:40
No worries at all.
Jon Paul Driver 0:41
What do you see going on?
Dave Clothier 0:43
Righteo JP, look, I just sort of talk… break it down into a few segments. One is to talk about demand, and then supply and just what prices are doing. For me and across the team right now if we just talk about the drivers from a demand perspective, there’s been some reasonable rain events across various parts of the country on the Eastern Seaboard, more so by a long way. But it’s done very little to ease fodder demand. Just because we are now in winter, of course, first week of winter. And on top of the rain, of course, the fact we are now in winter. It’s just increasing demand through degradation of quality of pasture and so forth, with some very heavy frosts over the last few weeks, from where we are in Southern Queensland, right down the eastern seaboard. Probably another factor to a lesser degree is the End of Financial Year effect. There are growers who are wanting to defer payments, and there’s certainly graziers depending on their situation on whether they’re looking to fill their on farm storage is now or they’re going to do it in the new financial year. But there is a factor in supply to talk about there. We’ll do that in a moment. From a demand perspective, like we’ve we haven’t experienced the strength that we have in our web sales and inquiries that is happening at the moment. And it’s been like that now, probably since the last time we spoke, you know that six to eight week pattern, probably more predominant now is the fact that we’re getting a lot of repeat customers online. But we’re also getting a lot of new customers. And that sort of driven through the demand in the south and creeping into the north through my previous comments. And of course, the great news is, I think is that all grades are continuing to sell. So that augurs very well as we move forward into in the new season, it’s still a step away, but it’s certainly setting that up. Any questions from your side on the demand?
Jon Paul Driver 2:43
Just one around general livestock inventory? Do you have a sense on whether we’re retaining animals or are sending more off to slaughter?
Dave Clothier 2:52
Look, I think from the west, if we talk about Western Australia, that’s certainly happening. They’re in extremely dry conditions over there, there’s stock heading to the abbatoirs and there’s stock coming east. You know, I always look to try to look on a positive note, you know, Northern Australia, you know, Queensland, Northern Territory and Northern New South Wales, for that matter, have had exceptional seasons, livestock numbers at an all time high, carving rates have been exceptional weaning rates and weaning weights and that type of scenario that will continue to feed into the eastern seaboard from a supply perspective. The forecast for beef prices is very strong for the next couple of years.
Jon Paul Driver 3:35
You’re welcome.
Dave Clothier 3:37
Yeah, thank you, USA.
Jon Paul Driver 3:40
There probably is an influence from the States that we’re at the lowest beef herd, the smallest beef herd since the 50s.
Dave Clothier 3:47
Yeah, that’s right. I’ve heard that I think 73 years or something. Yeah. And of course, the other thing that we’re seeing all the time, in this neck of the woods is just a continued growth, which I keep talking about. Every time we talk, the expansion, that feedlot sector, like there’s some key messages in that they’re not doing that without some security around the future pricing. So we’ll move into the supply space. As I said, Western Australia is pretty tight at the moment, like it’s only local supply, which is very limited. They have very limited pasture growth, there has been a rain event right down the southwest corner, but it’s had a little effect or no effect on demand. South Australia talking to locals just in recent days, like it’s it’s the driest start to season in 100 years of records. But that’s certainly no need to panic or anything like that. There’s areas that haven’t received much more than 35 or 40 mil year to date. And given the fact that they’ve sown in dry, that they have some concerns, but they’re certainly not panicking. There’s a long, long way to go.
Jon Paul Driver 4:56
We call that dusting in. Yeah, right. We do it too, there’s a term for it.
Dave Clothier 5:01
Well, dust is something that I’ve got plenty of over here, that’s for sure. We just had one of our inspectors over there last week. Local stocks are pretty limited in South Australia most of a large majority is sort of secured for current or future deliveries to handle that demand. So if we move into Vic, like something that is not normal in the fodder industry within Australia is there’s a lot of fodder moving from Victoria, into South Australia, lots and lots of wheels rolling into there where traditionally that Victorian job is covered through the local Victorian market and travels north. So a lot of it travelling west, and there’s still reasonable volumes or hay remaining in Victoria, across all grades, although lots of quality hay are diminishing. And when I say diminishing, there’s still quite a volume out there, but they’re just in smaller lots. So it becomes more challenging for anybody wanting to secure large lines. That’s a tight job at the moment. And the other good thing about I’ll just come back to the all grades are selling like that ’22 season, weather damaged product that there was copious amounts of Victoria. It’s certainly diminishing at a rate unseen by some of our larger growers, which to me augers exceptionally well, in the new season. I think there are a lot of people scratching their heads, where this weather damaged product was going to move to now that it’s moving. I think it’s setting the industry up for a cracker new season, where we’re not in the same situation we were last year, we were challenged for shed space, it was quality hay sitting out on pads, which is at a higher risk, of course. And I just think we’re in a far better space when we’re talking about new season. New South Wales, you know, the main story there really is cold weather has certainly set in, there’s been some significant rainfall in east and parts of the Hunter and so forth in recent times. But it’s had little effect on demand. Most of those people are aware of the demand for quality hay, and protein and energy through this time of year. So there’s sort of demand has lifted for graziers or buyers, looking to fill on farm storages. If we move up into Queensland, we’ve had a cracking season of the demand really is in that feedlot space, the weaner job’s pretty much over now. Still trickles out in some cases, but largely, it’s in that feedlot space. And as we know, they’re looking for continuity and consistency of product 365 days a year, they’re all about weight gain, whereas the rest of the country is in a maintenance pattern. So that sort of supports the all grade selling business move into the pricing. If we’re talking about national pricing, as a general statement, prices are very firm, there’s still product moving over the fence type deals for paddock stacks that are out there. But there’s product moving from one end of the country to the other. The only area where prices are lifting is in those quality grades of cereal. And there’s still some quality vetch lines out there where those prices are lifting just through the whole demand perspective, which is still healthy for the industry. And you can’t blame the growers for taking those opportunities, given some of the challenges they’ve had in the past. But probably the big picture stuff is there’s absolutely no need to panic, there’s plenty of volume of all grades of hay across the system just albeit there’s no larger lines of quality hay. They’re smaller lines. And I haven’t really talked about lucerne, we’ve got a lot of lucerne in the system. Traditionally, they are smaller lots, and they tend to to fit that demand a bit later as we move through winter. So plenty lucerne out there. Plenty of hay of all grades.
Jon Paul Driver 9:13
Now correct me if I’m wrong. I did hear your sentiment is that inventories are moderating.
Dave Clothier 9:20
Yeah. Which is nothing new. This is what we experienced every year in Australia. You know.
Jon Paul Driver 9:25
Seasonal demand, right?
Dave Clothier 9:26
Yeah, yeah, it’s a big continent. I think we’ve all just got to take a turn at this drought situation. And at the moment, South Australia and Western Australia in there. It’ll be our turn one day, every Australian farmer or anyone in agriculture knows that. We’re experienced at handling both and we’ve just got to pitch in together, and try and make sure everyone’s getting supported right throughout the industry.
Jon Paul Driver 9:53
With that, Dave, thank you for sharing your thoughts and experience.
Dave Clothier 9:57
Thanks very much, JP. Always a pleasure, mate.
Again, this has been the Feed Central Hay Matters podcast, our guest today was Dave Clothier the National Sales Manager
