Hay: What’s Going On?

Hay baler sales are staying strong in a weak market, but Andrew Hobbs discovers much will depend on the season ahead

A total of 835 hay balers were sold in 2018, a rise of 14 per cent on the 732 sold in 2017 (Source: AgriView)

There was one bright spot amid bleak conditions for machinery dealers in 2018, according to data produced by consultancy AgriView and released by the Tractor & Machinery Association earlier this year.

A total of 835 hay balers were sold in 2018, a rise of 14 per cent on 732 sold in 2017, while sales of hay tools including mowers, rakes, bale wrappers and forage mixers were also higher, up to 2,018 from 1,936 the previous year.

Agriview general manager Alan Kirsten tells tradefarmmachinery.com.au that the main driver of last year’s increase in sales was the large square baler market – producing bales that can be up to 3.2m long.

“That market usually goes in five-year cycles – where it does 200+ units one year and then it quietens down… but last year was the exception – and we had our fifth year in a row of 200+ sales of large square balers,” he says.

In normal circumstances balers of this size are sold to people targeting the export market, Kirsten says, with the bales produced able to fit easily into a container and to be broken up
gradually.

“We found a lot of the increase in the sales was in broadacre areas, where they traditionally would never go,” he says.

“That occurred because of the failed crops in the east coast, and with the shortage of fodder and the high cost of fodder, a lot of broadacre farmers went out and bought large square balers to go and harvest that failed crop.”

Kirsten added that while sales of mowers, hay rakes and tedders were each between 6–10 per cent higher in 2018, there wasn’t much of a trend to report on – as most of the increases were in reasonable tolerances.

“With the actual shortages of hay and fodder over the last few years and the failure of last year’s crop, there was an opportunity to turn it into cash,” he says.

“I am not talking hundreds, obviously, but it is now part of (broadacre farmers’) risk management program in terms of their machinery in the event of those failed crops that they can turn it into an income. While balers might be expensive they are not as expensive as a combine harvester, for example,” he says.

Baler sales by baler type (Source: Agriview)

Whether the big baler trend would continue will depend on the season, he adds, with high fodder prices likely to remain given what he says is a lack of supply reflected in hay prices.

The ABC reports pasture hay sold for as much as $450/tonne at clearance sales in South Australia in early June, well above what would normally be considered a good price of $150/tonne, and a price level that would go some way to compensate for any losses in a failed crop.

Data provided by AgriView to the TMA so far this year reveals that hay baler sales in the first five months of 2019 were 88 per cent higher than they were in 2018 – a trend he says is “completely off season”.

“The majority of sales (normally) occur in the Spring, but they have lifted quite strongly in the first five months of the year because there quite simply is not enough fodder around the country,” Kirsten says.

Tractor sales received an unexpected boost in June 2019, as buyers took advantage of the End of Financial Year. Check out the story here

The Australian Bureau of Agricultural and Resource Economics (ABARES) is predicting an increase in winter crop production of about 20 per cent to 36.4 million tonnes, with 19.6 million hectares planted across the country.

ABARES acting chief executive Peter Gooday says this increase reflects the decision to cut damaged crops for hay the previous year, adding that crops in South Australia, Victoria and southern New South Wales would be less reliant on winter rainfall due to above average rates in May.

“On the other hand, below average autumn rainfall and low soil moisture levels in Western Australia, northern New South Wales and Southern Queensland constrained planting and hampered early development of dry sown crops,” he says.

“In order for crops in these regions to develop, they’ll need sufficient and timely winter rainfall.

“However, there remains a significant chance that most areas unlikely to exceed median rainfall will still receive enough to sustain crops that established successfully through until spring,” he says.