Hay prices have never been higher, according to Dairy Australia data back to 2019. Prices are higher than during the 2019 drought across the country, with south west Victoria the worst affected.

There are differing theories as to whether these prices will be maintained according to Mercado. On one hand the de-stocking that has taken place in southern regions over the past few months, combined with a drive to replenish stocks will see plenty of excess pasture cut and made into hay. That will increase supply and reduce price, as happened in the 2019/20 season where improved conditions rapidly reduced prices. However, some observers claim this shortage is more extreme, evidenced by WA being trucked across from WA in large volumes, suggesting east coast stocks are practically zero. The late autumn delayed the sowing of hay crops, limiting yields, and for hay to be drawn out of the hands of growers who are looking to replenish stocks, prices will have to remain strong.

Relatively weak cereal prices are also a factor, according to Mercado. If a barley, wheat or oat crop is likely to yield 4t/ha of grain at $300/t, this equates to $1200/ha.  Cut the same crop for hay, yielding 6t/ha at $500/t, and it’s $3000/ha.