Ouyen hay growers will begin cutting their cereal and vetch hay crops this week, demonstrating the impact of the early sowing.

Seasons such as this can show what a production powerhouse the South Australian Mallee can be.

Like many others, Mallee hay growers are applying fungicides to their large and increasingly valuable oaten hay crops.

The moist and dense canopies of these oat crops provide an ideal environment for fungal growth that can trim growth and reduce quality through the discolouring of leaves. Rust has been found in oat crops near Tocumwal recently.

As paddocks are considered too wet to apply fungicides with land based gear, aircraft loaded with chemicals are being deployed in the northern Mallee for the first time in 25 years.

The cost of fungicide applications adds to other unexpected production costs for broadacre hay growers, including the fossil fuel dependant inputs of diesel, fertiliser and baling twine.

Although the high yields anticipated this season will help absorb some of these, time will tell if growers will be able to fully recoup these higher costs.

Weighing on hay prices will be the large carry-over stocks of hay in South Australia and Victoria. Some hay sheds are still three quarters full as growers have been holding out for higher prices.

Given the massive hay crops that are expected this spring, the shortage of shed space and the potential for heavily discounted prices for low quality cereal hay, prospects for prices such as $300 a tonne ex farm appear dim.

Many who stored hay in uncovered paddock stacks last spring are suffering from low buyer interest. Some parcels are being heavily discounted in order to clear stocks quickly.

When marketing hay, sellers look to determine the areas suffering low pasture growth that often generate fresh demand for hay and straw.

Such prospects in Victoria could include farms near Coleraine and Casterton which have received insufficient rainfall this growing season.

Far eastern Gippsland and the NSW South Coast are also missing out on some of the east coast low weather patterns that these areas depend on for rainfall.

The pastoral regions of northern SA have been a consistent source of hay demand but appear an unlikely prospect this season.

The 350mm to 400mm recorded on properties between Leigh Creek and Marree this year is 10-times the median year to date rainfall. This will promote growth of native pastures and limit future supplementary feeding of imported hay. Roughage demand from northern NSW and Queensland remains. Almond hulls are a valued roughage by dairy and beef operations and act as a benchmark for roughage demand. After falling consistently from $220 a tonne ex Sunraysia plant in March to $117 a tonne in mid-July, northern demand has seen almond hull prices edge up $38 a tonne this month to $155 a tonne.