THE PRICE of hay oat seed has skyrocketed due to a massive increase in demand and markedly lower production this year.
Current industry quotes for hay oat seed sit at around $1000 a tonne for uncertified seed, although it is unknown how much business is being done at these elevated levels.
There are suggestions the shortage may soon start to be a driver on milling oat prices as well as farmers look to substitute dedicated hay oat varieties with milling oats that can deliver reasonable hay yields.
Seed companies are warning that while they have some stock available it will be limited.
Much of the demand for hay oats is being driven out of South Australia, where producers have enjoyed a good hay season.
Wade Dabinett, Grain Producers South Australia (GPSA), said he had been inundated with enquiry for oat seed, despite little being available in his own eastern Mallee region.
He said producers in South Australia’s south-east with later crops were looking to take hay crops through to grain to take advantage of the seed prices but added much had already been cut.
“Price is not the issue for those looking for seed it is the availability that is important to them.”
However, the business development manager for a producer of certified oat seed said his company had ramped up production to meet demand.
“We’re looking to produce up to ten times as much seed for popular varieties, like the dual purpose oat Yallara, as we did last year,” said Aaron Giason, Baker Seeds.
“Will that be enough to match demand? We’re not sure, the demand is very strong given the high prices on offer for hay, but the message is there are some seed supplies out there.
“It will certainly pay to be organised, and if you start looking for seed in March you’re going to be disappointed but if you’re prepared there will be stocks there.”
He said the industry was anticipating some farmer to farmer selling of hay oat seed.
“It is not what we like to see and they may run into problems with weed seeds or disease or whatever but when there are shortage like this that will be the reality.”
Dan Smith, an oaten hay producer from Bealiba, in central Victoria, said hay would be one of his best earners this year.
He said hay was a sound risk management tool every year, but added this year it had come into its own because of the high prices.
“We have run out of moisture for the grain crops, so hay has been really valuable for us,” Mr Smith, who farms with brother Luke and father Bernie, said.
He said the marketing had not proved problematic, given the family had a long-term relationship with Goornong-based hay processor Gilmac.
“It’s certainly something we want to keep in the rotation.”
Chris Walsh, AGF Seeds, said many farmers were thinking along those lines, hence the seed shortage.
“You see people and they’ve taken off hay crops of up to seven tonnes to the hectare with prices up as high as $300/t, it is no wonder they are looking to plant more hay crops next year, especially given a rebuild in fodder stocks isn’t going to happen overnight.”
He said the high hay price, combined with the marginal moisture at hay cutting time, convinced many to lop crops that would otherwise have been designated for seed.
“It’s all led to this situation where people are talking about $1000/t, I would not think there is much happening at that price, but that is what the market is talking about so no sales are going on much below that.”
Milling oats are currently trading at $400-450/t, but there are reports the seed shortage is creating upward pressure on prices in that sector as well.
He said seed businesses could not afford to pay $1000/t off the header.
“By the time it is processed and ready for sale it could get as high as $1500/t and that is just not reasonable.”
Robert Christie, sales agronomist with Seednet, said demand was strongest out of South Australia.
Like Mr Giason, he felt there would be some supplies around but added farmers needed to get in quick.
“For varieties such as Yallara you would not want to wait too long and you wouldn’t expect seed to be cheap,” he said.
It is a massive turnaround in price for oats. In 2016, following a bumper year over much of the country, both hay and milling oats could be bought for less than $120/t.