May and June rain put a stop to rising feed grain and hay prices in northern livestock zones, and while prices have eased somewhat, the uncertainty around the season remains, and prices appear to be sticky.
At or above average May rainfall for almost all of the east coast cropping and livestock zones, along with some follow up rain in June took the heat out of rising feed markets. In late April and early May hay and feed grain prices in the northern half of NSW and southern Queensland took off.
Just as livestock hit the market, feed prices rallied, as concern about a dry winter and forecasts of El Nino drove demand, and tightened supply. Figure 1 shows the rally in hay prices never really took off on the Darling Downs, with central west NSW seeing the price bump higher.
Hay in the central west has held onto its gains, and it’s sitting with a midpoint of $285/t for pasture hay. Where supply is better, in the south, Darling Downs and in WA hay prices haven’t moved since harvest.
If we look back to the period from 2020 to the end of 2022, we can see hay prices are currently stronger, but the cost of production has also risen. It is hard to make an argument for a downside in hay prices anywhere except the central west. If the spring is kind, increased supply should see hay values ease back under $250/t.
Feed grain prices are generally not as sticky as hay, and we can see that in the decline in Darling Downs feed prices since the rain. Feed wheat delivered to the Darling Downs has fallen $75 from peaks back to $385/t.
Feed grain in the north still holds a solid premium to southern markets, where prices have also eased. In the south declining prices are more in line with falling international values, as there remains an exportable surplus in southern zones.
Figure 3 might spur a little action on the demand front. The chances of better than median rainfall for much of the southern cropping zones is minimal. It’s worth having a look at the website, and clicking on your area. For much of Victoria, SA cropping zones and parts of the Riverina, the chance of an unusually dry three months is above 40%.
What does it mean?
After the price spike in 2025, feed prices are now a bit more volatile. Just like the recent cattle liquidation, producers are trying to get a head of the curve in terms of being prepared for drought. Constant reports of an imminent El Nino no doubt help drive the push for preparedness.
Key Points
- Hay markets have maintained the rise in prices in the central west.
- Feed grain markets have eased, with rainfall helping cool demand in the north.
- Climate outlooks are dry for southern cropping and hay zones.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: Dairy Australia, BOM, Mecardo
