Rewind to September 2020, when a La Niña event in the tropical Pacific Ocean brought above average rain to southern Australia through spring and summer.
This resulted in a bountiful but wet harvest period, a time of strong pasture growth and limited demand for feed and water. Input costs fell while supporting a boost in farmer confidence and profitability for some time.
The Bureau of Meteorology is forecasting above average rain for the 2021 spring, singing a very similar tune to a year ago.
After a few months of neutral climate drivers, the BOM officially declared a negative Indian Ocean Dipole event in July.
Typically, such an event can cause warmer ocean temperatures north of Australia, increasing rainfall over southern and south-eastern Australia.
When previously active in 2016, it resulted in the wettest May to October period on record.
While the BOM does not anticipate this year’s negative IOD to match up to the strength of its predecessor, it is expected to boost the likelihood of above average rain well into spring.
On top of this, current climate models suggest around this same time, cooling of water temperatures in the tropical Pacific may reach La Niña levels.
Another La Niña event will only support the likelihood of above average rain, as last spring showed a little excessively in some regions.
Irrigation outlook
The 2021-22 water allocation year began with a roar in Victoria, supported by the previous month’s rainfall and high carryover volumes from last season.
Only two weeks in and the Bullarook system achieved 100 per cent high-reliability and low-reliability water shares.
If conditions remain wet over the next few months, which climate signs seem to be pointing towards, seasonal determinations for HRWS could reach 100 per cent for all systems as soon as mid-October.
While access to allocations may be in abundance, the strong supply of water will only temper its value, particularly as some farmers and growers feel sustained by rainfall events alone.
Temporary water prices appear likely to follow a similar path to last season, remaining economically justifiable for those looking to capitalise on reduced irrigation costs.
Fodder outlook
Currently, the fodder market remains swamped with a substantial amount of hay, albeit of varying qualities.
A significant volume of bales has been damaged from the wet hay-making conditions of 2020, not to mention the recent mouse plague.
With demand starting to pick up in some regions, although from a low base, preferences appear set on higher quality varieties. So much so, there are reports of an undamaged cereal hay shortage across most regions.
Many growers are now reporting depleted cereal hay stocks, with lucerne and vetch varieties not too far behind.
Another wet spring may continue to support pasture growth but could see the fodder market continue to drown in an abundance of hay.
The question is whether the upcoming harvest will provide the opportunity to replenish supply gaps with good quality hay, or further add to stocks of wet and damaged bales.
Adding to the supply pressure for high quality hay is the increased number of growers planning to take crops through to grain this harvest.
Decreased domestic and export demand for hay, relatively favourable growing conditions and rising global grain prices have seen the planted area for crops rise this season.
Current grain forecasts suggest the upcoming harvest will produce strong yields, despite a relatively dry autumn start for some regions.
While continued rain over spring would support yield estimates, it could cause delays during the harvest period.
Despite a somewhat inevitable decrease in demand for purchased feed, mounting international pressure after floods and record-breaking droughts in the Northern Hemisphere, such as the current event in Canada, are anticipated to support grain prices.
As weather outlooks suggest this spring may mimic the last, farmers could have another opportunity to capitalise on benefits brought on by heavy spring rain.
With strong water supply and pasture growth anticipated, the demand for supplementary feed is likely to remain subdued while weather conditions support hay and grain production.
So, while growers may have to navigate the impacts of another wet harvest, strong feed availability and lowered inputs costs could see some dairy farmers singing in the rain.