Minimal impact from extended NSW fodder freight subsidies; consultant

Jumbuk Consulting director Colin Peace said the extension of the $40,000 subsidy, from July 1, was a NSW "convention.

"They consider it every three months and roll it forward, so the July extension is nothing surprising," Mr Peace said.

"The biggest subsidy in the world doesn't make hay," Mr Peace said.

What was more surprising was the decision by the Queensland government, to phase out all subsidies, over the next two years.

He said subsidies were contentious, as they were seen to distort the market, were inequitable in that they didn't help other primary producers, such as grain growers, and they cost a lot of money.

"That's probably why the Queensland government is considering seeing the back of them," Mr Peace said.

Victorian Opposition Agriculture spokesman Peter Walsh urged the government to act after the NSW government continued its $40,000 subsidy.

Mr Walsh said Victorian farmers feared dwindling access to fodder supplies could get tighter after the subsidies were extended.

"NSW's subsidy covers half the cost of freight - up to $5 per kilometre - and this leaves Victorian farmers, who are also under serious financial pressure from drought, at a significant disadvantage," Mr Walsh said.

"There's strong demand for fodder right now, and prices are at a premium, and Agriculture Minister Jaclyn Symes needs to step up to ensure Victorian farmers have fair access to feed.

"Farmers are getting very anxious, and the government needs to act fast."

Mr Walsh said if the minister couldn't stop NSW putting Victorian farmers at a disadvantage she'd have to match the subsidy to support them.

Mr Peace said forage supplies, paddock feed and conserved fodder, remained tight and would do so until spring.

He said there had been exceptional growth in parts of the Wimmera, with many paddocks grazed off to ensure enough moisture was retained for spring.

"The coastal strip of Victoria has been going gangbusters, except for East Gippsland, so there's good grazing there, and producers are buying in stock, to take advantage of the market."

But the outlook for future fodder supplies would not be known, for some months.

"It all hinges on spring, as everything does, at this time of the year," Mr Peace said.

"People are just crossing every limb, finger and digit they have, at the moment."

He said hay supplies had all but dried up.

"People know it's not there and some have given up looking - hay is in demand.

"They might be able to snag a bit of hay from neighbours, but gone are the days when you can pick up the phone and order five semi-trailer loads."

Producers were now prepared for winter, having culled stock.

"They have enough hay and silage on hand to get them through winter, but not much more than that."

He said hay movements along Victoria's highways were deceptive.

"They are delivering hay that was contracted in the first six months of the year - that's hay that's not really being sold now, it was contracted many months ago."

Australian Fodder Industry Association chief executive, John McKew, said supply was as tight as it possibly could be.

"There are no excess hay or fodder products on the market, people are finding it very hard to source anything," Mr McKew said.

"The hay market is working, from an economic perspective, the only alleviation from this will be extra supply, and that won't happen until the end of 2019.

"It's very early to say what the harvest is going to look like."

He said some regions, such as western Victoria and South Australia, were doing quite well.

"In northern Victoria, there are some good growing regions, which have been set up with good rain, so we are hopeful for a good start to spring."

Good rains would lead to some supply, but he said he was not holding out hope for a bumper hay supply.

"It will give us some relief, but I am not suggesting we are going to see prices plummet - we are a long way from seeing cereal hay at $140/t."

Federal Drought Minister David Littleproud said farmers could now claim accelerated depreciation on new fodder storages.

Those receiving Farm Household Allowance, who were forced to sell livestock during the drought, may continue to receive payments if the profits are deposited into a Farm Management Deposit account.

"Farmers need to store more feed for their animals during drought, and we're helping cover the cost of new sheds, silos and other storages," Mr Littleproud said.

"The accelerated depreciation for fodder storages joins existing measures to help farmers depreciate water infrastructure and fencing costs."

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