Processor wants more WA hay for export

Hay processor and exporter Balco is looking to purchase hay from farmers to help meet increased demand from across Asia.

Balco chief executive officer Rob Lawson said many growers had reported that hay was their best gross margin crop this season, with favourable prices on offer.

"Now is the time to open shed doors and get any excess hay onto the export market," he said.

"The expectation is the international market will continue to provide better returns than the domestic market for hay.

"China has a growing appetite for high-quality Australian hay while there is continued demand from Japan, Taiwan, Malaysia, Indonesia and Korea.

"Adding to the demand is the emergence of new markets where dairies are acquiring a taste for Australian hay.

"Balco has recently been exporting hay for the first time to Vietnam where we see strong potential over the coming years."

Balco has contracted to export 165,000 tonnes of hay this year, up from 150,000t last year.

"Asian dairy farmers are eager to secure Australian hay as they look to boost their productivity, however, the market demand is outstripping supply," Mr Lawson said.

Balco procurement manager Pat Guerin said it was the right time for growers to release stored hay for export.

"Balco is seeing better quality hay, better prices and improved yields," Mr Guerin said.

"Growers can really take advantage of the optimum hay growing conditions we've experienced.

"The dry finish to the growing season has been ideal for harvesting crops and prices have improved over the past year.''

Mr Guerin said grain markets have been softer and the price has come under pressure.

"For farmers who took the decision to cut for hay, it's time to reap the benefit,'' he said.

"We're keen to hear from farmers across WA and South Australia as soon as possible."

Northam-based domestic and international hay exporter Bodiam general manager David Wells said the spike in China's hay requirements had been a long time coming, but was outgrowing supply.

"We exported hay to China four to five years ago and we didn't do a lot in between, but we've certainly done a lot more over the last two years and you're getting more and more inquiries from customers in China," he said.

"In WA we've got very high quality hay that we're paying the farmers a higher price for so we're demanding a higher price overseas.

"It's up to the customer to work out whether they want to pay those prices or they want to search for a cheaper product or a lower grade hay which they may get from SA or it may not be available at all."

Mr Wells said his company could have taken much more hay this year than was available, with domestic demand and oat crops kept for grain taking some volume from the market.

"The quality was very high but there was still a lot of farmers that had oats in that decided to harvest for grain, so while the oat plantings were up overall we didn't get big hay volumes," he said.

"On top of that no one has got any pasture anywhere, the cattle industry is booming and all the pellet mills are flat out making pellets for shipping boats and domestic feed.

"We've had these big fires as well down south so there's a lot of demand for feed, whether it's hay, straw or pellets, so the pressure is on hay domestically."

Mr Wells said he didn't expect this demand to drop off this coming season, with many growers set to sow a dual purpose oat crop and gauge whether they would cut for hay or keep it for grain based on the season finishing rainfalls.

He said Japanese and Korean markets were also stable and showing signs of increased demand, making oat hay a reliable choice for growers.