Getting the most out of making, storing and selling hay

Hay has proven to be a viable enterprise choice this year.

Current high prices are primarily due to prolonged dry conditions in New South Wales and Queensland creating significant demand and growers who’ve carefully preserved their – previously considered worthless – hay have been able to extract handy margins despite the low rainfall in local areas.

Hay production requires skill and management not only in the paddock but in storage and marketing too. In this feature article, BCG investigates several components of the hay production value chain: the grower, the storage provider and the marketer to find out how they see the season and share their experiences about making the most of hay.

The grower

Simon Cook’s family have been producing hay for years. Based on a grain and hay property at Hopetoun, he says his father, Ross, made the initial decision to cut a crop for hay because they were “sick of getting frosted paddocks”. Joining forces with a neighbour, they purchased a mower and rake, then a bailer and have shared this machinery and skilled labour during the peak production periods, ever since.

The enterprise has increased from one barley paddock to 30 per cent of the operation producing vetch and oaten hay into dairy and export markets.

When it comes to hay production, Mr Cook says “moisture is everything” so it is tested prior to and during baling. They aim for hay that “comes out of the shed in the same condition as it went in” so it’s moisture tested on a weekly basis in storage. The Cooks will store and sell their hay throughout the year so reliable storage is essential. They avoid storing hay in paddocks as much as possible because previous experience has shown a considerable wastage amount.

The storage expert

Longer term storage options look viable for hay given the product from 2016 was worth something and it offers a good part of a risk management strategy for cropping and mixed farms.

Lennie Grace, Sales Manager at Action Steel, says the benefits of storing hay in sheds includes ease of operation, flexible shed use, superior weather protection and improved safety over other storage methods such as tarps. However, he says functionality considerations such as location and design are essential to get the best out of your storage investment.

“Probably the biggest benefit of sheds as a storage option is the flexibility of use” Mr Grace says. “If hay storage is not a need every year, these shed types are easily converted for bulk grain storage, or even machinery storage meaning that some type of return on investment can be achieved every year for the complete life of the shed.” Storage of pesticides or other farm chemicals isn’t advised in your hay shed. They’re a fire risk in themselves, as well as a potential accelerant should a hay stack combust.

Mr Grace says, it’s important to consider the orientation of the shed with the majority of hay sheds constructed with three walls and the long, open side facing either east or north. “Every site is different” he added, and producers should consider the location of tree breaks and farm yards and shed access including all-weather truck conditions.

“We also recommend building the shed up on a gravel pad to ensure drainage away from the shed” he said. “We’ve seen plenty of poorly prepared sites which has resulted in water finding its way into the shed and therefore damaging hay.”

Attaining construction permits is also essential. “Requirements around building sheds has become more stringent in recent years” Mr Grace said. “Obtaining a permit is generally not a difficult process provided documentation and drawings are of a quality standard”.

Action Steel is a corporate partner of BCG and look after the permit application process and offer advice around design including bay spacings, storage height, capacity/shed size, risk of corrosion and storm water management.

Hay prices

Hay producers have been buoyed by high prices but with rain now falling in droughted areas, what are hay prices likely to do in the immediate to medium term? 

Colin Peace, Jumbuk Consulting, believes northern demand could drop quickly.  

“Once demand in New South Wales and Queensland stops drawing on Victorian hay supplies, prices will depend on the supply and demand balance within the local market” he says. 

Mr Peace believes short term prices will depend on how patient producers are to sell.  

“Many have become hay-makers this season with the expectation they will sell their hay off the baler but it’s not possible to find buyers with the cash to pay for 12 months-worth of hay in a two-month window” adding that the short-term sell pressure will determine the short-term price, but the overall supply/demand balance will not be realised by the market until autumn next year.  

He emphasised the need to store hay under cover and monitor high moisture bales for heating. “Look after it because it’s expensive stuff” he says. 

In terms of market preference, Mr Peace says buyers are showing an immediate preference for cereal instead of canola hay with prices for both hay types varying according to the near-term supply and demand balance.  

However, he adds that canola hay growers will be rewarded for their early cutting and a product much improved from that baled ten years ago.  

Every quality will find a market and buyers will be more particular if supply exceeds demand. 

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