14-Apr-2023
11:47:55
Hay Prices Continue Higher 04/14 11:47
Drought Conditions Limit Hay Supplies, Causes Prices to Skyrocket
How much forage was produced last season is the main factor in hay prices
right now. Those regions with good production have considerably lower prices
with more supply. However, areas which saw production reduced by drought have
less supply and as a result much higher prices.
Russ Quinn
DTN Staff Reporter
OMAHA (DTN) -- Hay prices, along with supply and demand, remain regional in
nature, according to hay growers and sellers. Some areas have a good supply of
hay and thus prices are lower, while other locales are short of hay and prices
have climbed significantly higher.
The key to where hay prices go in the next growing season will be how much
moisture is seen in forage growing regions. Adequate moisture would increase
supplies and lower prices while another drought will keep prices high and might
climb even higher.
HIGH HAY PRICES CONTINUE
Kim Summers, a hay producer from Chambersburg, Pennsylvania, told DTN she
expects her hay prices to continue at their current levels. Short of large
increases in fertilizer and fuel prices this spring, no notable price changes
are expected.
Summers' hay is sold in small square bales and many of her customers are
horse owners along the East Coast. On a per ton basis, her average hay price is
about $300. Grass hay will run around $7.50 per bale while alfalfa hay will top
out around $10 to $12 per bale, she said.
Summers, known on social media as Hay Lady in PA, has some hay available but
said the market is tightening up as we move toward grazing season. She tries to
keep some hay to the end of the hay feeding season to continue to serve her
customers.
The growing season in Pennsylvania was dry last year, which limited
production a bit. The winter was also dry with very little snow, she said.
"If we can get some adequate rains this spring, I think we could still be
alright," Summers said. "The first cutting of alfalfa could be short but some
grasses like Timothy won't be cut until June, so we do have some time to catch
some rains."
SOME HAVE FORAGE
Further west in northeastern Iowa, the hay market is completely different.
Dale Leslein, manager of the Dyersville Hay Auction in Dyersville, Iowa, said
they currently have a glut of hay. In turn, hay prices are "reasonable" in the
region.
The area saw timely rains last growing season, which increased forage
production in the region. This winter and spring have also seen much moisture,
he said.
This additional production has limited the price of all types of hay at the
auction, he said.
Leslein said alfalfa hay in large square bales topped out at $275 per ton,
but most of the hay sold in a range of $180 to $220 per ton. Grass hay had a
high of $180 per ton, but most of the hay is now in a range of $120 to $130 per
ton.
Another reason for the plentiful supply of hay is the area has lost much hay
demand in recent years as aging farmers have gotten out of the livestock
business, especially dairy farmers. Low milk prices have also spurred the
exodus from milking cows, he said.
Leslein said he had an auctioneer friend who had 19 dairy sales in just 31
days in the month of March in Wisconsin. Some of these operations selling out
were 5,000 cow dairies, he said.
"Alfalfa acres in our area are falling considerably," Leslein said. "With
corn at $6.50 a bushel and soybeans at $15.00 (a bushel), guys are planting
these crops instead of alfalfa."
DROUGHT LIMITS SUPPLY
Across the Hawkeye state to the west, the hay situation is completely
different.
Paul McGill, owner/manager of Rock Valley Hay Auction in Rock Valley, Iowa,
told DTN the severe drought just to the west of their area has had a huge
effect on the hay market in their area. Production was less because of the dry
conditions, thus increasing forage demand, he said.
Much of their supply is coming from northern areas, as far north as
Manitoba, Canada, where moisture last growing season was ample. While supply is
generally meeting demand, the market is strong.
"Supply has been really good for the last few weeks, although fieldwork is
starting now," McGill said.
McGill said alfalfa has sold in a range of $210 to $260 per ton in recent
weeks. Grass hay, meanwhile, has sold in a much wider range as low, grassy
areas were harvested but these forages are of a lower quality. Lesser-quality
hay has sold around $130 per ton, grinding grass around $175 per ton to $200
per ton and good grass hay $230 per ton, down from $250 per ton months ago.
McGill said corn stalks were at near-record-high prices this winter. The
forage has sold for $110 per ton to $135 per ton, up from $80 per ton to $95
per ton last year.
Demand has increased for the forage because of the cold conditions this
winter as many producers used the bales for windbreaks and didn't want to feed
these temporary structures. Some corn stalk bales were also damaged from being
frozen to the ground in wintry weather, he said.
MOISTURE MATTERS
The outlook for the hay market depends on how much moisture falls this
growing season in hay growing regions. More moisture would push production
levels higher and hay prices could decline some. However, continued production
issues could keep forage prices high.
When asked if prices could climb even higher, Summers said there is a point
where hay buyers cannot afford to purchase hay. Buyers are already trying to
find alternatives to expensive hay, often at the expense of their animals, she
said.
"If it doesn't rain, there could be more high prices," said Summers, who
estimated another dollar could be added to cost of her hay.
McGill agreed if rains were to return to drought-ravaged areas the hay
prices could return to more historical levels. High hay prices make it
difficult for livestock producers to maintain break-evens, he said.
The weather in the next three weeks could go a long way toward determining
which direction the hay market ultimately moves this growing season. Areas with
dry conditions will need moisture to increase forage production, he said.
"Every year is different, I guess we will see," McGill said.
Russ Quinn can be reached at Russ.Quinn@dtn.com
Follow him on Twitter @RussQuinnDTN
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