Hay availability down, prices up in 2012

Markets
Mar 1, 2013
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On the heels of Rocky and Q—the winter storms, that is—the issue of winter hay feeding is a key concern. Though for some, winter always means feeding hay, the unusual and sudden levels of snow many parts of cattle country got last week and the week before have potentially intensified that need.

A pair of important hay-related USDA reports—the Crop Production report and the Crop Values 2012 report—were released during February summing up the state of 2012’s hay supply and prices. Though we are now a few months into 2013, that information coupled with activities of hay markets around the country is the best vision of the hay situation.

According to the production report, 2012 saw 56.26 million acres of hay—both alfalfa and otherwise—harvested. Average yield for hay was 2.13 tons/acre with a total production of 119.88 million tons. Alfalfa hay saw higher than average hay yield at 3.01 tons/acre and represented 43.4 percent of the total hay crop. This is in contrast to 2011 when fewer acres of hay were harvested—55.63 million acres— yet better yields ultimately led to greater production at an average of 2.36 tons/acre and 131.14 million tons, respectively.

Both 2011 and 2012 were drought years—and as 2013 continues to be so far—but the year-to-year impacts were lessened in 2012 compared to 2011, at least in January. See the maps at top right to see a comparison of the rainfall of those years. Though only a snapshot of the long-running overall drought, January rain can suggest what might be seen later.

Estimated prices paid for hay across the last few years showed an interesting dynamic. According to the Crop Values 2012 report, the average price per ton paid for hay across the board in 2010 was $114. For alfalfa hay, that number went to $123 and for unspecified hay, it was $97. Jump to 2011 and those prices went up an average of 56 percent. Overall hay was $178/ton, alfalfa was $196/ton and other hay $132/ton. In 2012, the prices for hay again increased. Alfalfa hay increased 8 percent compared to 2011 at $211/ton and other hay increased 9 percent to $144/ton.

Across cattle country in the west, state-specific average prices for a ton of hay differed wildly between 2011 and 2012. Despite the continued drought, some lucky states actually saw decreases in their second-drought year prices. Average prices of all hay fell in California, Idaho, Nevada, New Mexico, Oregon and Texas. Texas saw the most impressive declines in all hay prices from 2011 to 2012, shedding 27 percent for an average annual price of $127/ton. This also brought it closest to its pre-drought average hay prices of $123/ton which it saw in 2010.

The unlucky western and Corn Belt cattle states were more numerous than the lucky ones, however. Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North and South Dakota, Ohio, Oklahoma, Utah and Wyoming saw average hay price increases from 2011 to 2012. The increases went from 2 percent—Utah, with $189/ton hay in 2012 versus $185/ton in 2011—to up 69 percent for North Dakota, which saw hay go from $71/ ton in 2011 to $120/ton in 2012. Colorado had the dubious honor of having the most expensive average hay in all of the reported cattle states in 2012 at $235/ton.

In the state-specific hay markets, activity has varied, but overall was called steady to slightly down. Based on the commentary accompanying many of the reports, it seems some of the weakness was simply due to the effects of the storms on sales’ attendance rather than actual supply and demand factors.

Colorado: The most recent state hay market quoted prices at steady to weak with limited movement. Large alfalfa squares were going for $250-275/ton ($280-300/ton delivered) for top quality in the northeast and $230-240/ton at the cheapest in the San Luis Valley area. Very few other classes of hay were reported widely with a smattering of grass hay and corn stalk hay offered. Though the recent snows have brought much needed precipitation, overall precipitation is still at an average of 60 percent what it should be.

California: All classes of hay were reported to be mostly steady in all of the state’s six regions with demand good though on light trade activity. In the most recent report, 6,185 tons of various hay types sold, compared to the same time in 2011 which saw 15,635 tons sell. Premium alfalfa ran the gamut of $220-245/ton with $285/ton delivered noted. Good wheat was all over the map from $114-200/ton, and premium orchard grass was steadily at $245/ton.

Kansas: Hay trade was called slow in the most recent Kansas hay market reports, this likely due to the effects of the storms. Demand was called light to moderate for dairy, grinding alfalfa, and alfalfa pellets, though there was improved demand for stock cow hay and grass hay. Most all of the state got snow with the storms, with many places reporting 16 inches. Wind accompanying the snow caused problems with the cold. The moisture was certainly welcome but it did increase the supplemental feeding and bedding requirements, especially for dairies and livestock producers whose herds are calving.

Texas: Hay prices were called mostly steady in the most recent Texas markets. There has been something of a stalemate going on between hay buyers and sellers given the high cost of feed and production, making the two groups’ goals go in different directions. Many parts of the state continued to get moisture in the form of rain or snow, which will be beneficial to winter grasses, wheat and other forages.

Various forage types were available in differing quantities, qualities and sizes.

For the most part, large bales of premium alfalfa went for $260-280/ton around the state, with $300- 330/ton for the same delivered. Large bales of Coastal Bermuda ranged widely depending on area with some portions seeing it at $70/ton and $90-105/ton delivered, and other areas seeing it at $120-160/ton.

Corn Belt/Midwest: According to a collective report by the University of Wisconsin Extension program, overall hay prices for the area were slightly down compared to the prior week, with sale activity varying widely based heavily on weather. Some areas were said to have sold out of inventory in the recent past due to producers of all sorts stockpiling hay ahead of the storms. — Kerry Halladay, WLJ Editor


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