Dairy Australia chief executive Jeff Odgers said the organisation’s latest Hay and Grain Report confirmed that although not in drought themselves, WA dairy farm businesses were being impacted by rising feed prices.
The situation may also get worse before it improves and Dairy Australia and Western Dairy are preparing to provide what assistance they can, Mr Odgers said, as more of WA’s hay and grain goes east where prices have risen by more than 200 per cent in some areas, Friday’s report showed.
The cost of bought-in feed over summer and into autumn will be a critical factor for many dairy farmers right across Australia who rely on it to maintain herd condition and milk production, he said.
“Dry conditions on the east coast and elevated feed prices will impact dairy farmers in Western Australia, particularly over the summer and autumn period.”:
Mr Odgers’ comments and Hay and Grain Report figures back up claims by WAFarmers’ dairy section president Mike Partridge that WA dairy farmers face a cost of production increase of 3.5 cents a litre on the milk they produce due to drought demand-driven rising feed costs (Farm Weekly, September 13).
More than 40pc of Australia’s dairy farms are located in drought-affected regions, with more than 2000 dairy farms affected across New South Wales, Queensland and the Murray and East Gippsland dairying regions of Victoria, according to Dairy Australia.
“The dairy industry is facing substantial challenges around feed supply and costs,” Mr Odgers said.
“Typically, farmers will grow the bulk of their annual feed supply in spring, but for many dairy farmers, notably those along Australia’s east coast, it will be tough to achieve the growth required and farmers will need to consider feed purchases to address the gap.
“Our major concern is that we have seen rising feed costs heavily impacting farmers’ cash flow and access to feed, particularly fibre, is becoming much harder.
“This means as dairy farmers try to hold core herd numbers together, they’re more exposed to the inflated feed costs we’re seeing right across Australia.
“It’s vital to continue to plan ahead to secure sufficient fibre, to set ourselves up for the year ahead,” Mr Odgers said.
Dairy Australia’s latest Hay and Grain Report, comparing prices at September 14 with those in January, revealed average hay prices in South-West WA have increased 23pc – from $175 a tonne in January to $215/t this month.
The average South West WA hay price has been $215/t since a $40/t mid June price hike, according to the report.
At $215/t it is $24/t above its 2017 peak and $2 above its five-year average peak.
The report quoted prices steady in the week to September 14 for cereal hay ranging from $180 to $250/t, Lucerne hay $450-$490/t, straw $80-140/t and pasture hay $80-$200/t.
It said quoted prices were based on shedded hay of good quality and colour without weather damage.
“Most of the fodder being moved in the region is committed with little supply available,” the report’s section on South West WA stated.
“Many farmers will be moving into the next season with empty sheds,” it stated.
The report noted hay price increases of up to 291pc – to $450/t – in South Australia, up to 286pc – to $425/t – in northern Victoria and up to 211pc – to $575/t – in central west NSW.
Average grains price in WA also increased by almost 26 per cent since January – from $270/t to $340/t – according to the report, after peaking at $360/t mid August.
At $340/t, WA grains prices were still $10/t higher than their July 2017 peak and $29/t higher than their five-year average peak price, the report showed.
For the week to September 14, it quoted wheat down $5 to $350-$360/t, feed barley down $5 to $365-$375/t, Triticale steady at $405-$415/t and oats steady at $245-$255/t.
“Offshore weakness has pushed feed grain values in WA slightly lower over the past week, however for those looking to secure grain for both prompt and longer term delivery, prices remain at the upper end of historical observations,” the report stated.
“With grain from WA now being the cheapest in the country, it appears as though domestic consumers in WA are going to keep facing competition from their east coast counterparts and export customers during and after this year’s winter crop harvest.”
The report noted wheat prices steady at up to $485/t in Queensland, $475/t in NSW and $455/t in Victoria, barley prices steady at up to $605/t Queensland, $490/t NSW and $470/t in Victoria and sorghum prices steady at up to $435/t Queensland, $480-$475/t NSW and Victoria and up to $505/t in SA.
The price of Maize rose $20/t across most of Australia, except in central west NSW where it rose $75/t in the week to September 14, with prices generally ranging from $505/t to $580/t in Eastern States and steady at $405-415/t in WA.
While acknowledging WA’s dairy industry situation is not as severe as the east coast’s, Western Dairy has a range of support for dairy farmers, particularly in relation to feed sourcing and budgeting.
When the silage season concludes, it will run a series of feed management workshops and discussion groups to ensure farmers are prepared with feed planning for what it expects will be “a financially challenging summer and autumn”.
Dairy Australia has a one-stop reference centre for all feed shortage information at dairyaustralia.com.au/feed shortage.
