HAY storage sheds are going up at the new Gilmac Wagin processing site with work on track for hay to be received locally this season.
The new plant will give local oaten hay growers somewhere closer to home to deliver instead of making a round trip to York.
Gilmac general manager Munro Patchett expects about 50,000 tonnes to be delivered to the Wagin site this year, with growers already taking out contracts.
"Lots of farmers have contracted, lots are thinking about contracting and some are thinking about taking a bet each way as they've seen the oat price and will see what happens closer to the time," he said.
"Overall it's been very positive.
"The oaten hay industry has had a fairly negative history down here and hopefully we're bringing a new level of professionalism and reliability for local growers."
Gilmac's new Wagin plant will be its fifth site across WA, Victoria and South Australia and will service growers in the area surrounding Wagin and parts of the eastern Wheatbelt.
"We have already got quite a few new farmers (signing up)," he said.
"Some who haven't grown hay before and some who swore they would never grow hay again and some that grow hay for other companies are coming our way.
"There are growers as far down as Gnowangerup taking out contracts, but most people are from around here or a bit more east to Pingrup and Lake Grace way.
"We've had those guys carting up to York in the past and it's great that they'll just have to come here now."
About 20,000t of oaten hay had been coming to Gilmac's York site from the Wagin area in recent years and with plans on track to meet the 50,000t target for this year, Mr Patchett said there was room to expand the site to accommodate 80,000t.
The Wagin-Dumbleyung Road site is located on 80 hectares about six kilometres out of town and will include four storage sheds, a plant production shed with hay press, a weighbridge, site office and crane for shipping container loading.
The earthworks for further storage shed pads is being done as a part of the current site works to allow for easy expansion into the future.
The remaining land is being cropped with oats where possible and work is being done to rehabilitate a salty portion of the property and align a creek to avoid flooding.
Initially the plant will employ between three to five people, but will expand to about 15 people.
Mr Patchett said the workers would be sourced from local townships.
Gilmac was founded by New Norcia farmer Peter Mackie in the mid-1980s and exported its first shipment of hay to Japan in November 1987.
Existing plants at York and New Norcia also include a pellet mill which supplies to live export vessels and domestic feedlots.
Gilmac has existing long-term markets in Japan, South Korea and Taiwan.
"There's an emerging market in China and lots of our competitors are in there," Mr Patchett said.
"We haven't set foot in that market as we're selling all the hay we can supply to our traditional markets.
"Our markets really value oaten hay from WA and we've been exporting to Japan for 28 years.
"And as other exporters leave to go to China we can expand our markets in familiar territory where there is an established demand.
"Japan is all about high quality and good packaging and we're really good at doing that and conversely you generally get a better price.
"Traditionally the prices of hay in China have been lower than in the other markets.
"That's changing slowly as they're starting to pay more, but better returns from Japan and South Korea mean we can give better returns to the grower."
Mr Patchett said Gilmac was still seeking hay for this season as demand grew and supplies left in Australia dwindled.
"I think there won't be much hay left at the end of the season in the whole of Australia," he said.
"We're down to the odd shed here and there and people are selling now that it has rained.
"South Australia doesn't have any hay in sheds and Victoria is very low so there will be very little hay carried over which is good news for the growers as all of the exporters will be hungry for hay."
Mr Patchett said while the oat price was attractive, it was worth considering whether an oat crop would make the grade and better returns could be gained from cutting it for hay.
He said he expected more interest from growers closer to harvest as the season outlook became clearer.
THE oaten hay industry around Wagin is being encouraged by Gilmac's investment in the region.
Woodanilling oats grower Russell Thomson, who also owns Wagin-based hay baling business Big Bale, said growers were getting back into hay and his phone was ringing with inquiries.
"The industry has suffered dreadfully from a lack of "Our contracting business has suffered through lack of professionalism where companies aren't delivering on "People here have dealt with Gilmac in York because it's worthwhile going that far for the service you get.
"We've lost a lot of our business through people trying out the hay game and being burnt and not ever going to touch hay again.
"But several of those guys are growing hay again this year.
"Contract-wise, our phone is ringing from old clients who are keen to have a go again."
Mr Thomson said the market was also set to improve for local growers as the new competition would drive up prices.
"It's fantastic for me as a grower and a contractor," he said. "The oaten hay industry will be alive here again and it will be something people consider as reliable and worthwhile."
Big Bale contracts for Gilmac at New Norcia and is involved in the Hamersley station Rio Tinto oaten hay project near Tom Price.