Since the last Reid newsletter, Victoria has welcomed some decent soaking rains with many areas experiencing some steady follow up since. Crops in general have finally germinated but not without some casualties where resowing was required. Given the lateness of when this occurred it has also meant a re-think in what can be sown to ensure a crop with the best potential.
End users such as dairy farmers have had a tumultuous time in searching for appropriate fibre sources and as a result pushing up demand for commodities such as hay, not to mention the need in some areas to procure water daily for stock. Rains have provided a ‘green pick’ in paddocks, but pasture establishment is a long way behind from where it should be at this time of the year with the risk of a green drought being a possibility. The cold weather will also naturally slow the rate of pasture recovery which in turn will mean a continuation of supplementary feeding. Cows seek extra feed due to the colder conditions which is exacerbated by those that are in the joining phase where peak condition is required.
Local markets became disconnected from overseas drivers approximately 2 months ago. The detachment was primarily due to the concern around the lack of Autumn rain and the ever-increasing need for animal feeds. As a result of this extra demand Wheat rallied by $20p/t across a four-week period. Barley had an even stronger rise overtaking Wheat prices in the process. This was on the extra demand coming from the Beef and Sheep sectors, plus what has been a consistent draw back into South Australia from the Western parts of the state. Maize also rallied but not to the large spreads to the Wheat values we saw last year. It was mainly due to growers not being satisfied with the market price and the extra demand in feed.
Canola meal supplies have been pushed to the limit even though oil seed crushers are running assets virtually at capacity. With the lack of on farm supplementary feeding more end users have turned to stock feeding producers to fill the ‘hungry gap’. With strong demand for Canola meal, markets rallied by $50+. The decline in Soymeal prices has fortunately meant this premium quality protein source is now a viable and vital lifeline in feed mixes.
Since the rains however, prices have settled back down for cereals and has given the grower/seller confidence to release more product into the market. The soaring prices for input commodities such as urea has been driven by an excessive demand. This has been fueled by the need for crops to be resowed and taking advantage of spreading prior to the rain events.
The NSW Riverina has provided a major component of feed stuffs which have found their way into Victoria and South Australia. This hasn’t been limited to Wheat, Barley or even Maize, but key feed raw materials such as Cottonseed and Almond hulls have played a big part. A healthy demand from the South has ensured Cottonseed gins are playing a crucial role in meeting the large feed requirements. Almond hull processors are also key in terms of providing critical fibre sources in a season where the demand is high.
With the various active supply lines for feed, it is important to acknowledge how road transport acts as a lifeline particularly in times of drought. Affected regions need to be connected with essential feed requirements but are also reliant on the transport industry for the movement of stock and water supplies in some circumstances. The movement of grains, byproducts etc. requires collaboration across various industries to ensure the huge task of providing drought relief is met. Reids are actively engaged with suppliers and transport companies alike and understand the importance of these partnerships.
We look optimistically toward the coming months in the hope seasonal conditions and production can get back on track with a long period of sustained success for Farmers to come.
To increase your livestock farming gains & expert nutritional feeding advice please call 1300 REID FEED or enquire here >
Author
Justin Fay
Commodity Manager
