WHEN will hay prices improve?

This question is looming large in the minds of many hay producers.

While grain growers have enjoyed the recent resurgence in the grain markets, hay prices have remained low.

In mid September last year, APW wheat and cereal hay were both trading close to $160 a tonne on Mallee farms.

Many grain growers took the logical step of cutting their crops for hay.

Hay often yields around twice that of grain crops.

With hay crops yielding as much as five to six tonnes a hectare, only a small portion of the area sown to grain made a large difference to last year's hay production.

Prices for new-crop wheat are impressive; even feed wheat is priced at more than $200 a tonne delivered to Victorian ports.

Compared with September last year, the price of new-crop APW wheat is $50 a tonne higher at $210 a tonne on farm.

These grain prices are a stark contrast to current hay prices which are languishing at some of the lowest levels for the past five years.

Since last September, hay prices have fallen about $50 a tonne to a midpoint of about $110 a tonne on farm this week.

Apart from the fact many grain growers have found the marketing of hay pretty tough in the past 10 months, prices will favour grain.

Clearly, the production of new-crop hay will not be as great as last year due to the higher grain prices.

Hay merchants say they are finally moving hay to dairy farmers, but it is not racing out the gate.

With all the talk about excessive amounts of hay around, buyers have been trying to select the best hay as cheaply as possible.

When trying to source cereal hay with energy levels over 10 units of metabolisable energy, many have been disappointed. Dairy farmers in northern Victoria have been trying to secure these stocks at $110 a tonne delivered.

Instead, the market for hay with 8 ME is selling from $120 to $130 a tonne delivered to the Goulburn Valley.

Better-quality shedded hay from the Mallee with energy levels of more than 9 ME has increased from $150 a tonne delivered last week, to $160 a tonne this week.

Cereal hay has been moving into West and South Gippsland.

With good July rain on top of June falls that were 25 to 50 per cent above average, farmers say their paddocks are the wettest in years.

Hay is providing a roughage source for dry and milking cows. Sellers expect more hay demand from Gippsland as some dairy cows begin to calve.