However, steadying input prices, stronger than expected water availability (in some regions) and generally favourable seasonal conditions at critical times have all been, and will likely remain, a supportive force through to the end of June.
As we look ahead to 2024-25, these supportive dynamics will provide a strong resource base, even if dry conditions persist in some areas.
El Niño has ended and the El Niño-Southern Oscillation (ENSO) is expected to remain neutral through to the end of July. As such, the long-term outlook for the winter months indicates a roughly equal chance of both above and below median rainfall for much of the country.
The far south of Western Australia, South Australia and south-west Victoria are the exception, however, with below median rainfall remaining likely over the same period.
For some areas, promising rainfall in autumn provided a much more positive start to the winter growing season than initially expected.
In those regions, this has taken pressure off short-term feed demand, while in others, such as south-west Victoria, conditions remain drier than average and demand for supplementary feed remains elevated.
Similarly in south-west WA and parts of SA, autumn pasture growth has been hindered by low soil moisture and minimal rainfall.
Across other parts of Victoria, southern NSW and Tasmania, the viability of grazing opportunities stemming from recent rainfall is dependent on how quickly winter temperatures set in.
In an almost complete reversal from last year, strong green feed availability, and conserved fodder stores on-farm, are both mitigating demand for purchased feed for northern and eastern NSW.
Coupled with a strong start to the winter growing season, confidence around feed supply over the longer-term continues to grow in these dairying areas.
While dependent on follow-up rainfall, there is general optimism around feed availability through to the first half of the 2024-25 season.
Current fodder pricing is reflective of elevated demand from both winter feed contracting and for filling immediate feed gaps in some areas.
As such, prices for most fodder lines are expected to remain relatively steady or move down over the medium to long-term, once hay production plans are realised at the end of 2024.
This is on account of strong pasture availability and conserved fodder stores on-farm in some dairying regions likely balancing against higher demand out of others.
With a supportive autumn break now ‘in the bag’ for many cropping regions, planted areas across the country are expected to be largely on par or slightly above last season.
Therefore, looking ahead, local grain price movement will also largely depend on whether favourable conditions continue for eastern Australia and whether WA remains dry.
Globally, supportive signs for buyers continue in fertiliser markets.
Heading into an already typically slow demand period, assuming no surprises, prices are likely to remain under pressure.
Close to normal production levels across Europe, and theoretical return of Chinese nitrogen-based fertiliser exports, both adding to expectations that there is little upside to prices, especially over the short to medium term.
Indicative values of diammonium phosphate (DAP), urea and muriate of potash (MOP) are currently 8 per cent, 25 per cent and 11 per cent below the five-year average respectively.
Water availability remains strong across much of southern and eastern Australia, despite drying conditions in some parts over autumn.
Water levels of monitored storages in Victoria remain between 48 per cent to 94 per cent of capacity, and temporary water prices remain at historically low levels.
Average prices across northern Victoria and in the Murray Irrigation system are currently 89 per cent and 78 per cent below the five-year average, at $21/Ml and $14/Ml respectively.
Continued strong water availability and low prices are likely to carry into next season, with strong reserves not only boding well for 2024-25 opening seasonal determinations, but also if dry conditions weigh on feed production prospects throughout winter.
Operating conditions currently vary significantly among dairying regions; however, a sustained normalisation of feed and fertiliser prices will help to ease the unpredictability that has defined input markets over the last three years.
In a similar dynamic to the 2023-24 season, a generally strong resource base, timely rainfall and favourable conditions in some regions will support the stabilisation of input costs into 2024-25.
Isabel Dando is a Dairy Australia analysis and insights adviser.
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