Hay prices have hit record levels and, as the national supply continues to shrink, there is hot competition for fodder in unconventional markets such as clearing sales.

Key points: Hay at clearance sales, held in farmers' paddocks, hits $450/tonne

Hay at clearance sales, held in farmers' paddocks, hits $450/tonne During a 'good' season, this hay would fetch around $150/tonne

During a 'good' season, this hay would fetch around $150/tonne Farmers are still scrambling to find fodder, with autumn rains arriving too late

Over the past fortnight, pasture hay at clearing sales — sales held in farmers' paddocks to traditionally dispose of farm tools and machinery — has sold for as much as $450/tonne.

This hay would make about $150/tonne during a 'good' season, according to industry analysts.

Drought and dry conditions have caused the fodder shortage, and although many regions have received an autumn break this rain arrived too late for pastures before winter.

Craig Telford, who farms cattle and sheep at Glenburnie in South Australia, bought 78 bales of pasture hay for $90 each at a recent clearing sale in Kongorong, South Australia. He purchased similar hay just weeks ago for $65/bale.

"I thought prices should get better because we have had some rain, but it hasn't grown that well and there's too many stock on I suppose," he said.

Mr Telford does not have enough hay to get through winter and the autumn break at his place came too late to grow decent pasture.

"It's disheartening to see all the cattle every morning waiting at the gate for something to eat," he said.

"It's an endless job and takes all the money, but what choice is there? We've got to keep them going and keep them happy and healthy."

Hay reaches record prices due to lack of supply. ( ABC News: Cate Grant )

Clearing sale hay fetches a premium

The agent who organised the clearing sale in Kongorong, Green Triangle Livestock and Real Estate director Chris Manser, said the $90/bale hay would cost half that much in an ordinary year.

The lot was made up of different clovers and grass growing on the property, but equating to $360/tonne far exceeded what good quality pasture hay would fetch in a traditional market.

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"For the quality of the hay it's a pretty good price … we'd only be looking at $30–$40 a bale in a normal year," Mr Manser said.

High prices have been reported at other clearing sales too, with pasture hay selling at a clearing sale in Kernot, Victoria, for roughly $450/tonne.

The 440 bales at the Kernot clearing sale sold to a top of $175/bale for this season's hay, while hay from three years ago made $150/bale, according to livestock agent Pat Bowler, whose employer, Landmark, conducted to the clearing sale.

He said there were up to 15 people keen to secure the hay.

"They had to buy it to feed their cattle because they have no other feed through this hard season that we have had — that's all they have got left," he said.

"They have used all their reserves of silage and their own hay and they still have to get through three months of winter."

Pasture hay at the clearing sale in Kongorong, South Australia. ( ABC Rural: Leonie Thorne )

No relief expected until November

Fodder reached record prices late last winter, but the ongoing dry conditions and low level of hay stocks has meant the market has already reached this price level this year.

Colin Pearce, a hay analyst with Jumbuk Ag, said clearing sale pasture hay prices in a "good year" in southern Victoria could attract a small premium, but would mostly reflect the traditional market of $120–$150/tonne, or $40–$50/bale for a 330kg bale.

"We have gone through a pretty decent harvest in southern Victoria [but] … the low carrying stocks and above-average demand has meant we have bounced back to those same record high prices we saw last winter," Mr Pearce said.

"We are already at record high prices for hay."

And with harvest around the country not due to start until late Spring, Australian Fodder Industry Association president, John McKew, said there was no short-term relief from high hay prices.

"Prices will remain high until such time as we get more supply, and no more supply is really going to hit the pipeline until the end of the year when we enter the next harvest," he said.

Back at Glenburnie, Mr Telford estimated his clearing sale haul would feed his "hungry cattle" for about three weeks, then it's back to looking for more.

"It's been fairly hard [to find hay to buy], there's not much local about now," he said.

"In fact I haven't seen any advertised, and I think in last week's Stock Journal there was only one lot of hay actually for sale."