Cereal hay prices are at more than $300 per tonne in Western Australia, with demand expected to rise as the season goes on.
It is expected that livestock producers across the State will need most, if not all, the hay they produce this year, with weather forecasts predicting little if any rain for the next three months for WA's South West.
WA export quality hay producer Suzanne Woods, Emdavale Farm, Calingri, said given current seasonal conditions, "it is expected that crops will be lower yielding but higher quality hay".
Ms Woods said late-seeding conditions in WA followed by some high spring temperatures would see a tightening of supply across the State.
She said this year was shaping up to be "one of the poorest seasons in terms of hay yield".
"It couldn't be more of a contrast to last year," she said.
"A major proportion of the crop is high quality" and while that was good for export quality hay producers it also provided some challenges as their markets required a variety of hay grades.
"The profile of the markets is that they need a range of product so it will put pressure on the industry, especially with the demand for straw," Ms Woods said.
"There's also a significant State demand for fodder.
"It's shaping up to be a challenging season to be able to supply what they want and keep pricing reasonable.
"There's already hay moving around the State to cover the shortages as a result of drought in the Murchison and Gascoyne."
Ms Woods said domestic pricing was dependent on the individual buyer and their need for fodder and the price they were prepared to pay.
"Look at what happened on the east coast last year," she said.
"We have a smaller number of farmers and livestock but we will be following the same path."
Ms Woods said it was not all panic stations for the fodder industry with some Victorian areas having had a good productive season to support the demand in the east, as well as the export market.
She said Hay Australia had strategically placed its hay processing facilities around the country to cater for the change in circumstances domestically and minimise the risk.
Last year WA producers filled a lot of the export order, while this year that might come from the east.
"Total volume exported for the current season is expected to be over one million tonnes with about 650,000t coming from WA," Ms Woods said.
"Predictions were for 900,000-950,000t for the season so it is encouraging to see that export market share has been retained along with a strong increase in domestic supply."
Ms Woods said the 1mt mark was "what the industry had crept up to".
"China has become a significant player and that is the reason for the increase," she said.
Australian hay exports to China were meeting the demand particularly from its dairy sector, while the beef cattle industry was important as well.
"We got up to 1.2mt a few years ago and it's still bouncing around that," Ms Woods said.
"With the shortages from the east coast last year and WA this year the quantities are not as plentiful as we would like.
"As sources of protein change, the profile of livestock rations will change as well.
"We are yet to see what's going to come of that."
In October the Australian Fodder Industry Association (AFIA) said that in WA "a lot of canola has been made into hay this season".
While new season hay was being made in the region, "yields are down across the State and this is reflected in the price".
"With limited carryover from previous seasons and poor yields across the State, securing long-term, reliable sources of feed may be an issue," AFIA said.
"The export industry continues to dominate the WA market and is a solid indicator on pricing.
"Exporters continue to seek out quality hay and as a result, will set the price in the market for quality hay."
Last week Dairy Australia provided some details to WA producers highlighting that farmers were finishing off making cereal hay but recording low yields across the State.
"Demand remains strong in southwest WA with many farmers having poor pasture growth," Dairy Australia said.
"New season hay is on the market and there is very little carryover from previous seasons."
It said the price per tonne, sourced and delivered locally, for cereal hay ranged from $300 to $380/t with Lucerne hay $450 to $490t.
Straw prices remained steady at $130 to $180/t, while pasture hay was available from $240 to $280/t.
In the AFIA Spring 2019 Focus on Fodder publication AFIA chairman Frank McRae said due to the seasonal conditions, particularly in the Eastern States, "contractors are also being placed under pressure as all areas are coming in together resulting in a contracted harvest period".
"Expected yields in many areas have also been reduced without finishing rains and the widening impact of drought," Mr McRae said.
"The export report, with total volume exported for the current season expected to be over a million tonnes, shows the resilience of the export fodder industry to be able to maintain supply and quality to meet customer expectations in the face of adversity.
"The domestic market is a little more uncertain with drought, frosts, lack of irrigation water and prohibitively high-water prices influencing fodder making decisions.
"All the major fodder using industries such as beef feedlots and dairies are still being impacted by seasonal uncertainty and high prices for grain and fodder.
"There has also been a noticeable increase in the number of producer's lot-feeding lambs as high lamb prices continue (to remain strong)."