Rob Ford told a WestVic Dairy business breakfast in Warrnmabool this week that grain and hay prices “exploded” in recent months.

Grain prices over $400 a tonne rang alarm bells for dairy farmers, Mr Ford said.

It had been a terrible year for for grain production on Australia’s east coast and quarantine restrictions meant Australia was disconnected from international markets, he said.

But Mr Ford said an expected substantial increase in hay supply was likely to take some of the heat out of the market.

“There is a lot of hay further south this year. There’s an increase in the area under hay in western Victoria,” he said.

The availability of silage and pasture would also help to balance the market.

The weather would set the price direction but the climate outlook was not encouraging, he said.

He expected “it would be autumn before we see any good news.” 

Mr Ford, who was expressing his own opinion and not Saputo’s, also said government subsidies and public donations to farm feed relief programs meant there was a lot of “artificial money” inflating the market. 

Mr Ford, who buys feed supplies for Saputo (which includes Warrnambool Cheese and Butter) suppliers, said it was staying out of the market until hay prices dropped.

Mr Ford said it was important for farmers to know when was the time to sign contracts for hay and grain deliveries.

“It’s important to have a buying strategy, to have a price where you stay in the spot market and a price where you lock in some tonnes,” he said.

Hay prices would have to come down for farmers to be profitable, Mr Ford said. Farmers should be paying between $260-$280 a tonne for quality cereal hay, he said.

Mr Ford also urged farmers to negotiate with feed vendors and insist on quality.

“There will be a lot of poorly cured hay delivered this year. 

“Drought hay burns. 

“Have some standards and check your hay,” he told farmers.