HAY making is steadily moving south.

Baling of export-destined oaten hay in northern Victoria will finish within a week.

Cereal crops for domestic consumption are typically cut later as more mature crops.

Baling of these crops will continue this month. Reports on the quality of hay made so far have been favourable.

Recent thunderstorms have caused light damage to some hay, yet other crops in the same district have been left dry without damage.

In the Western District, grass paddocks and crops of oats and vetch have been cut for pit or baled silage.

Wilted crops have been transported up to 50km to be ensiled on southwest Victorian dairy farms.

With the later season and recent rain, hay production in this area won't start in a big way for another month. It remains a buyer's market.

Whether it's vetch or cereal hay, a hay seller may need to chase down a potential seller and make a market for hay. As milk prices are still low, most dairy farmers are not buying hay now and are conserving their cash flow for other priorities.

Cereal hay has been sold as low as $140 a tonne delivered to dairy farms in the Goulburn Valley and $150 a tonne delivered to the Heytesbury Settlement.

Vetch hay with some weather damage has been selling as low as $160 a tonne ex-farm in western Victoria.

As a higher quality and premium-priced hay, sellers may need to pick their timing carefully to capture their target price.

Buyers and sellers of hay are now assessing the market outlook this season.

Growers looking to sell hay are encouraged by the fact that they are not faced with large competition from grain growers forced to cut failed crops.

Grain growers have considered the options for their crops and commodity prices favour hay production.

New-crop prices for both feed barley and cereal hay are around $115 to $130 per tonne ex-farm in western Victoria. At these levels some grain growers are capturing the larger yield and gross margin of hay.

The volume of hay being cut and about to be cut is impressive. Unlike other years, buyers feel assured that if they don't buy hay now, there should be ample stocks to choose from next autumn. Hay sellers also feel assured.

Fears of a deficit of hay and forced selling of stock are not present this year.

The demand for hay should remain in place next year as culling of livestock has greatly reduced.