JC Tanloden looks at a third hay processing plant - at Ouyen

JC Tanloden, owned by Wingara Ag, has two export hay processing facilities, at Epsom and Raywood, and is investigating building a third at Ouyen.

Wingara's Corporate Strategy and Investment director Roger Prezens said it made sense to set up the planned $8-12 million plant at Ouyen, in conjunction with the town's planned road-rail intermodal facility.

Due diligence was currently being undertaken on the proposed plant.

Wingara, an ASX listed company with a market cap of $30 million, is seeking to grow its hay export business, to China, Korea, Japan and Taiwan.

"Ouyen is a two and a half to three hour drive from Raywood and Epsom," Mr Prezens said.

"It's not financially viable for the growers, Wingara or JCT - but there's been an increase in the growth in oaten hay for export in the Mallee-South Australian border region."

Ouyen Inc is proposing the construction of a $24 million road rail intermodal, on a 77 hectare site, near the town.

Read more:

Plans for a new road-rail intermodal terminal at Ouyen

"Once we have done the due diligence, from the initiation of the project to actual production, would be about 12-18 months," Mr Prezens said.

"If Raywood is any indication, we would be processing 50-60,000 tonnes of hay a year."

Project manager for Ouyen Intermodal and Ouyen Hay Export facility Michael O'Callaghan said there was a big catchment area, from the region, for export products.

"There were four parties showing an interest in doing something at Ouyen, and JC Tanloden/ Wingara, was an absolute standout, having growers in the region.

"We did the analysis on the volume of intermodal freight that is produced in north west Victoria and it came to the conclusion that more than 80pc of that is going by road.

Three of Australia's four largest almond producers have provided support, in writing, for the Ouyen intermodal to be constructed.

"We have a large number of table grape producers and transport operators, wanting to put freight on the rail, we have wine transport operators and there's citrus, as well."

A large grain accumulator, wishing to pack grain in Ouyen, had also expressed interest in the intermodal.

JC Tanloden's Hay Purchasing manager Kane Dempster said the Ouyen region was ideally suited for growing premium hay.

"It's becoming increasingly important for growers in spreading their risk," Mr Dempster said.

The Ouyen region's point of difference was that it produced premium hay.

"The Mallee is very well suited to high quality hay," he said.

"The tighter seasons mean the hay generally has thinner stems and shorter length, which are desirable visual traits for export hay

"The same stress/conditions on the plant are also beneficial to a desirable nutritional profile."

The drier and warmer finishes often experienced in the Mallee also made for a smaller windrow, shorter curing window and shorter weather exposure risk, when compared to southern growers.

Mr Dempster said it was challenging to have a spring rainfall that benefitted both hay on the ground, and cereal crops requiring good finishing rains in the same window.

"Export oaten hay does provide some good diversification in risk management,," he said.

"It's very hard to get the right conditions for grain to fill, if the moisture profile requires, and also have high quality hay,

"Ultimately being an inverted relationship weather wise, at least one enterprise should benefit from a wet or dry spring."

Mr Dempster said rail was very important, in making delivery competitive, when compared with road transport.

While there was the potential for 50,000-75,000 tonnes a year, there was the opportunity to double that harvest, "providing the value and return is there, for producers."

Have you signed up to Stock & Land's daily newsletter? Register below to make sure you are up to date with everything that's important to Victorian agriculture.