PRODUCERS are stockpiling their hay until autumn in the hope that a lack of supply could send prices higher.
Prices are already firming but few producers are inclined to sell, believing prices could climb even further.
They are prepared to hold off selling until the autumn, when long-term hay producers traditionally place their hay on the market.
Despite the higher prices, there are some dairy and beef producers who are concerned with the lower production of hay this season and are prepared to buy now.
Sheep producers between Lake Bolac and Macarthur have been buying pasture hay in round bales from around Hamilton.
Dairy farmers between Camperdown and Scotts Creek have been buying vetch hay in large square bales from the Wimmera.
Their buying activity, although limited, is moving the market.
It has been a patchy season for vetch producers.
Those crops that managed to avoid the impact of mice and then received timely rain during August and September achieved yields of 2.5 tonnes a hectare.
Some less fortunate producers found their vetch hay yielded between 1-1.5 tonnes a hectare but are still impressed with the wheat yield response after their vetch crops.
Prices for cereal hay and pasture hay are $5 to $10 a tonne higher this week.
Some hay producers are taking the price and selling. These producers who cut high-quality vetch or cereal hay are pleased that the market has opened higher for new crop hay and see that the current prices meet their targets.
Future price directions for hay are normally determined by the timing and extent of the autumn break. Should the winter-intensive rain begin early, pasture production will be boosted and hay prices will be under pressure.
However, if the autumn break is delayed or the rainfall is limited to light showers, hay prices could be further supported.
Some hay producers have been focused on their grain harvest and are now assessing the commodities they wish to sell.
Some will gain sufficient cash flow from their canola and wheat and will be prepared to ride the fortunes of the hay market in the hope of higher prices in the first half of 2012.
Other hay sellers are not prepared to take the risk on hay prices rising any further.
Hay prices remained flat last season and they see little benefit in shedding hay for sale in six months.