Industry concerns about the dry season’s impact on future fodder supplies were outweighed by discussions about the Australian export market’s continued growth and stable position within the global market, at the Australian Fodder Industry Association’s national conference held in Adelaide this week.
AFIA chief executive John McKew said most growers had a component of their production system that was focused on the export market, and this helped to generate robust grower discussion at the conference.
“There is certainly an undercurrent of concern about the domestic hay market, but as a fodder producing industry we are concerned about our ability to service all markets,” he said.
“This season is a very unusual situation.”
Mr McKew said an important, strong relationship between growers and exporters had been built in the past decade but the growth in the export market was not responsible for the nationwide domestic hay supply shortage.
“Depending on the size of the hay production year, exports account for about 10 per cent to 15pc of supply,” he said.
“But the level of demand and movement of fodder in the past five months is unprecedented.
“Producing export hay requires a lot of preparation and it is not a decision that can be made overnight by growers, so it is important for export relationships to be maintained.”
Gilmac general manager Munro Patchett said hay sheds were filled to capacity last year but the supply had since been absorbed by both the export and domestic markets.
“Growers could not sell hay for $80 a tonne back then and no one wanted to know about it,” he said.
“I would suggest there will be a shortage of export hay for the coming season so potentially, very high prices will be paid to farmers, which is a good outcome for the industry.”
Mr Patchett said WA growers were on-track for average yields but SA and Vic were preparing for a well below average year and therefore the export market would have to compete with domestic demand.
“Wheat and barley crops could be cut as hay because of the season finish but we will have to wait to see what the season does in the next few weeks,” he said.
Mr McKew said exporters had also been conscious of the domestic situation and released 2016-17 surplus hay that did not make export grade into the domestic market.
“We do not want to hit the panic button but since we have cleared two years of production in less than six months, if we do not have an average year this year, tightness of supply is something that will be dealt with in the foreseeable future,” he said.
