Record grain imports from Western Australia are yet to have any real impact on feed prices for Victorian farmers.
Western Australian grain handler CBH expects to ship two million tonnes of grain to the east coast, this year.
Dairy Australia senior analyst John Droppert said there didn’t appear to have been a clear impact of Western Australian wheat on east coast prices yet.
“But every bit of supply helps,” Mr Droppert said.
“In general, grain prices appear to have come off a bit, as the harvest has come in, but they are still a prominent part of a very tough feed cost situation.
“The combination of grain, hay and irrigation water costs is the kicker, and adding in summer weather, the results are starting to show up in the milk production numbers.”
The latest DA production figures showed a drop in November of more than eight per cent, compared with the previous season, while year to date production was down 4.8pc.
Northern Victorian production fell 20.3pc to November and 13.1pc year-to-date.
The latest DA farm inputs and costs grain report put prices for wheat in the Goulburn Valley at $415 and $425 a tonne, with maize and sorghum reaching between $480 and $490 a tonne. In the south-west wheat prices ranged from $400-$410, while in Gippsland they were between $455 and $465.
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The report said prices were steady.
Bendigo based water broker H2OX reported a rapid increase in prices for water brought more sellers to the market.
This had seen prices steady around $530 a megalitre, despite the extreme weather. In the Murrumbidgee, prices have softened from $700/ML down to the mid $600s, with not much volume trading.
Rabobank senior analyst Michael Harvey said he believed there would be a heated market for purchased feed for some time.
“On a positive note for Australian dairy farmers, new season hay has hit the market,” Mr Harvey said.
“Sizeable volumes of canola crops and failed wheat crops have been turned into hay and silage this season.
“This has helped provide some much need feed and helped ease pressure on fodder prices somewhat - but prices remain elevated.”
He said there was also limited carryover from last season, across the sector, meaning fodder supplies would still be tight, on-farm.
“When it comes to purchased feed and grain, costs are still very high for Australian dairy farmers.”
Western Australian grain was filling some eastern seaboard deficits
“But the reality is that there will be a heated market for purchased feed for some time.
“Dairy farm margins are going to remain squeezed with no immediate jump in milk prices on the horizon,” Mr Harvey said.
A timely, and plentiful, autumn break would be critical for Australian dairy farmers in 2019.
“Better seasonal conditions will key to setting up a season for better home-grown feed which will reduce feed gaps and the subsequent reliance on high price purchased feed.”
Dairy farmer Paul Stammers, Katunga, Vic, said he wasn’t yet sure of the impact of increased imports on feed costs.
He said he locked in half his grain at $440 a tonne and had stored it on-farm.
“Hopefully it does something, the prices we are paying are not sustainable for the rest of the year,” Mr Stammers said.
“The grain price will determine whether we sell dairy milk or dairy beef.”
He said he believed the price could stay up for another six months, as feed companies would have already bought their grain, but the WA imports could also put downward pressure on prices.