Manager of Industry Development and Commercialisation for SARDI, Peter McCormack, where the varieties were developed, says in 2005 alone, the net benefits of the three new varieties were estimated at an additional $119 million to industry.

“Adoption rates are around 35pc for domestic use and as much as 75pc in export hay," he says.

“With these striking adoption rates and a higher share of total hay production reaching export quality and consequently price premiums, it is likely the 2005 figure is significantly higher now, and will continue to rise.”

Funding for research and development can produce a wide range of positive industry returns, Mr McCormack says, especially in improvements gained in plant varieties where adoption has been substantial.

“Positive economic outcomes include quality improvements and higher yields as a result of increased disease resistance, good stem diameter and plant colour.”

He says the current program is soon to release another three varieties.

“The demand for oaten hay is growing. Finding future varieties that are drought tolerant is the next challenge for the National Oat Breeding Program,” he says.

Nevertheless, an insecure funding base threatens future breeding of oaten hay varieties and chairman of the Australian Fodder Industry Association Lyall Schulz is concerned about the implications.

“With an increasingly insecure funding base, it is highly unlikely that new drought tolerant varieties can be developed," he says. "If funding continues to diminish, there could be a discontinuation of the oat product development work being undertaken.

"It will be to the detriment of our industry,” he says.

So Mr Schulz has encouraged those heading up the fodder industry to contribute to the debate about future funding by attending the Securing fodder for our future industry summit on June 11.

Murray Smith, partner at Balco Limited, Australia's leading processor and exporter of high grade oaten hay, says the expanding domestic and overseas markets are dependent on supplying top quality palatable hay.

“We must recognise the needs of our clients. We invest heavily into technological and logistical improvements to ensure that we remain internationally competitive.”

“Fodder producers in Australia need to gain greater yields to ensure they maintain gross margins amid rising production costs.

"This can only be achieved with new varieties that provide continual improvements.”

Balco sees Asia as a vast and growing market. The group already supplies Japan and Taiwan and has recently sent an inaugural shipment to Shanghai.

Mr Smith says the Chinese Government is dedicated to introducing free milk each day for all children in schools. Consequently, the opportunity to provide quality oaten hay to the Chinese dairy sector is a valuable future market for Australian fodder producers.

“Demand for quality oaten export hay will remain strong in the foreseeable future and the industry must rise to this challenge,” he says.