PASTURE quality in southern Victoria is falling and dairy and beef producers are seeking supplementary feeds.

This is having an immediate flow-on effect in the hay market.

Dairy farmers in the Heytesbury Settlement have found their pasture quality has collapsed in the past month.

Although a slight green tinge remains, pasture quality is now only half of what it was in December.

Many dairy farmers in this region were not able to produce large volumes of silage in spring, and silage is in short supply.

Further west, dairy farmers around Allansford and Koroit are also feeding out hay and silage earlier than expected.

Many of these areas have missed some critical rains and pasture production has suffered.

Pasture hay in large square bales is trading into a few dairy farms in southwest Victoria at prices between $135 and $150 a tonne ex-farm depending on quality and freight to destination.

Although the fall in pasture quality is yet to be fully reflected in the hay market, demand for higher quality hay is expected to increase in the next few months.

Hay merchants report that some buyers are prepared to pay the higher prices for hay but most are holding back.

A significant barrier for many buyers is the change in price from last year.

There is still a perception that hay stocks are burdensome and buyers have last year's prices in mind.

Summer rain was welcomed by lucerne hay producers and graziers with fodder turnip and fodder rape crops.

But rainfall this month has been limited and the forecast is for only light showers in the central regions of Victoria.

Last week the highest falls were in Gippsland, with Sale receiving about 30mm and Yarram 20mm.

Exporters and contractors are surprised by the number of paddocks of stubble that have avoided staining from the summer rains.

Some paddocks around Avoca have not had as much rain as those in the Horsham region and straw is still making the export grade.

As headers move out of paddocks around Lake Bolac, stubbles will be assessed for suitability for straw production.

A new threat to export straw quality is the summer weeds that are growing through the stubbles.

An increasing number of paddocks have been found unsuitable for baling for export straw because of contamination with ox tongue thistle.