Fodder transport subsidies, offered by interstate governments, are unlikely to significantly push up hay prices for Victorian farmers, according to industry experts.
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In July, 2018, the NSW government provided subsidies of up to $20,000 for transporting fodder and water, but a later announcement saw the amount doubled.
Victorian farmers, in the north of the state and Gippsland, have raised concerns the subsidies are forcing prices up.
But Australian Fodder Industry Association chief executive John McKew said supplies were becoming very limited.
"The situation we are facing is that demand is very, very strong, and supply is becoming increasingly tight," Mr McKew said.
"From our latest hay report, supplies are becoming very limited; most of the hay has already been spoken for, many of those still have supply are only servicing regular buyers.
"We are starting to see lower grade hay move through.
"We are constrained by supply; that's becoming a very significant, and somewhat perilous, situation."
Mr McKew said while freight subsidies could be seen as a distortion of the market, by some, for other farmers they were welcome.
"I don't think they are going to be the real issue, supply will be the key," he said.
Colin Peace, Jumbuk Consulting, agreed that hay supplies were tight, so subsidies were unlikely to have a big impact.
The demand for hay, from NSW and Queensland, came at a time when there were very low carryover stocks.
"You could argue it was probably the lowest carryover in the stock of hay, we have ever seen," Mr Peace said.
"Everyone is waiting for that big rain, that's going to make the market fall, but it's proving elusive.
"Production of hay last spring was pretty damned decent, it was an above average year, but we have chewed through it pretty quickly."
There had been nothing to buffer the demand, which had been experienced this year.