Hay Market Report: Supply, Demand, & Rising Logistics Costs

Summary: Secure Your Supply Now

The Australian hay market is currently facing a “perfect storm” of logistics. While ex-farm prices remain stable, the final delivered cost is climbing rapidly. Supply is moving further south – away from the core demand zones – meaning more kilometres are being travelled at higher diesel rates. Buyers should prioritise quality-assured lots with feed tests to ensure value for money as transport costs continue to rise.

Market Demand: Expanding Westward

Traditionally, demand has been concentrated east of the Newell Highway. However, due to a dry seasonal outlook that is potentially worsening, we are seeing demand spread:

• North-Western New South Wales: Significant new activity.
• Mid-Western New South Wales: Increasing inquiries as local supplies tighten.

Because of rising freight costs, buyers are no longer just looking for “any” hay; they are specifically demanding quality assurance. A verified feed test is now the primary driver of successful sales, as it gives buyers the confidence that the product meets their specific nutritional requirements.

Supply Dynamics: The Southern Drift

Overall supply volumes are healthy, particularly in Victoria and South Australia. However, the geography of that supply is changing:

• New South Wales: While hay is available, the centre of gravity for supply is drifting further south.
• Ex-Farm Pricing: The price at the stack remains static. If you see a price increase, it is almost certainly a reflection of transport, not a hike from the grower.

Logistics: The Elephant in the Room

The widening gap between supply and demand locations is being exacerbated by global economic factors.

• Diesel Prices: International volatility (specifically around the Strait of Hormuz) is pushing diesel prices up.
• The Freight Compound: Freight is now a combination of more kilometres being travelled at a higher per-kilometre rate. This double-hit is the sole driver behind increasing delivered prices.

Recommendations for Buyers

1. Don’t Wait: Supply is physically moving further away from you every week. Securing it now avoids future freight hikes.
2. Verify Quality: With transport costing more, don’t gamble on “average” hay. Always ask for a feed test.
3. Get Expert Advice: Reach out to the Local Ag team to deal directly with growers, or the Local Ag Plus team for tailored assistance in finding the right product for your needs.

Watch the full market update from Dave Clothier: