Unravelling the boom-bust nature of fodder in drought

By November 27th, 2019

Cut for hay or grow to grain? A pilot trial unlocks information about the fodder market during times of drought and aims to help farm finances and aid drought relief.

Cut for hay.

There can be good money in a bale of hay, but grain farmers aren’t in for that.

In a good year, farmers will grow their crops of wheat, canola, barley, sorghum, etc, to grain. But in drought, low rainfall results in depleted soil moisture, poor crop growth and an increase in devastating frosts. That all leads to reduced grain yield, often making cropping unprofitable.

Sometimes what should be vast, waving fields of grain are instead hastily cut for fodder for livestock. However, in times of drought farmers are met by an eager market, with livestock producers facing the tough choices of destocking, increasing their expenses by buying fodder, or compromising between the two.

Tim Ford from Feed Central says that the market for hay ebbs and flows with the conditions, but in drought this usually small market quickly transforms into a substantial one.

“During normal years few farmers trade fodder because there’s little market – livestock producers can mostly produce fodder from their own land,” says Ford.

“But with drought, those pastures fail; legumes produce only so much feed before they’re stripped bare, and producers need to supplement their feed. Demand emerges and a market scales-up.”

That fodder market, however, is not efficient. The fundamental problem is a lack of information for both industry and government, who don’t know how much supply there is, or where.

A recent pilot trial with the CSIRO, Feed Central and Data Farming aimed to reverse that at the request of the Joint Agency Drought Taskforce.

On-farm hay supplies.

Authorities currently have no way of knowing what happens to hay once it is cut.

Plugging information gaps

When crops fail or farmers decide their chances of growing them to harvest are remote, they can decide to literally cut their losses and bale for hay. Unlike grain, which is traded at a global level, fodder is largely consigned to state or national level trade. And even though platforms exist to support fodder trade, some vital information remains elusive, such as: how much fodder really is there, and where is it? What is the market price? What is the most efficient way for a property to receive fodder?

CSIRO research scientist Dr Randall Donohue says this information gap makes trading opaque, and that critically leaves government in the dark.

“In the fodder context, without better information, policy makers don’t know where to allocate efforts like drought relief funds and resources,” he says.

However, they have been working on a digital solution.

Fodder yield map.

Estimated hay yields from areas in the Riverina where cereal crops were cut for hay in 2018. Land use data: ABARES 2016, Land Use of Australia 2010-11, ABARES, Canberra, May. CC BY 3.0.

Sensing fodder supply

Using earth observation satellites, CSIRO, Feed Central and Data Farming teamed up for a three-month pilot trial in early 2019 to find a way to detect fodder production in the Riverina region of New South Wales.

“We used satellites to estimate the growth and yield of a paddock, and then detect when it was cut early for hay,” says Dr Donohue.

In the trial, the team was able to report on fodder supply one month after the satellite flew over the region. That is a significant improvement over the delays of existing reporting methods that report 3-6 months later. Dr Donohue is confident that reporting times can be further reduced, to less than one week.

“Our cut area estimates compared well with those of Australian Bureau of Statistics, but we were able to produce estimates much quicker, and we can produce data down to a paddock level, rather than just at regional levels.”

These data were supplied to the Taskforce via the Drought Map platform developed by CSIRO’s Data61 innovation group.

Tim Neale from Data Farming said that spatial modelling was used to estimate biomass for wheat, oats, barley, and canola crops. While the pilot was comparatively simple, a publicly-available final product would need more serious back-end processing.

“Machine learning would automatically take data fed back into the system by farmers themselves, and recalibrate itself,” says Neale.

Furthermore, the pilot proved that baseline information could be generated at a national level.

“In a country as big as Australia, drought will always be somewhere, so timely market information to help people know how much fodder is out there, where they can buy it from and for how much is the end goal,” he says.

Livestock eating

Knowing how much fodder is available could help stabilise the market during drought volatility.

Informing decision making

With further support the research team envision an app as the final product, where farmers can stand in their paddock and estimate their hay yield using the app. The second outcome can be streamlined reports to industry to identify where the dry matter is located and what volumes are available or have been cut.

This critical supply data is 50 per cent of the supply and demand equation, and a massive improvement to the current state of very poor fodder data availability.

The farmer could upload their hay yield, as well as their intention for the baled hay. Do they keep it on farm for their own use? Offer it for immediate sale? Or store it for later sale?

For policy makers, this would offer an almost real-time insight into the location and availability of fodder, significantly improving the logistics of drought relief. For industry, including farmers and commodity traders, it would also offer a lead indicator into expected harvests, improving the accuracy of the market’s pricing.

Tim Ford says the return to farmers could be the supply of current hay yield estimates for their paddocks as the season progresses, along with forecasts of likely grain yields, easing some of the stress around that critical decision during a drought – to cut now for hay or grow through to grain.

“Being presented with a yield estimate for your individual paddock and knowing how much money you would receive for hay versus a harvested crop would eliminate most of the guesswork,” says Ford.

“A hay harvest might not be the ideal outcome for a grain farmer, but it can still be profitable at a time when farmers can least afford to make the wrong decision. These are the types of tools farmers need to help minimise losses during times of drought.”

This capability could be a gamechanger for farmers, governments and markets, and is an example of the new possibilities emerging in agriculture in this digital age.

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