Hay prices stack up
U.S. acreage shifts sparked by historically high grain prices, the southern Plains' severe drought, and a weaker growing season has some Midwest hay prices running as high as double than a year ago.
With sharply higher revenue returns from corn and soybean plantings, the 2011/12 harvested hay acres have dropped 6.0 million acres since a peak in 2002/2003, according to USDA's October Supply/Demand Report.
To make matters worse, a 50-year spring/summer drought in the Plains states forced southern buyers to scour the country for hay, namely in the Midwest states.
As a result, forage used for feeding beef and dairy cattle and horses is getting harder to find and more expensive, Stephen Barnhart, Iowa State University Extension forage agronomist, says.
"I'm hearing that producers should take an inventory of their hay supply and gauge their needs for this winter, due to uncertainty of availability."
On the other side of the coin, auction managers say they are not seeing as much hay coming to auctions, Barnhart says. "It's suspected that sellers are sitting on their hay, waiting to see what will happen with prices later in the winter."
Bill Campidilli sells small and large bales of hay at a weekly auction in Perry, Iowa. In the past two months, this central Iowa auction manager has seen prices hit double what they were a year ago.
"We're just seeing more buyers than sellers of hay. Last weekend, we sold some large round bales of good grass hay at $110 per bale. Today, I could probably get $125 for good net-wrapped bales, due to demand. Last year, we would have sold that same quality of hay for $60-$65 per bale," Campidilli says.
Overall, hay prices, though varying from region-to-region and from size and quality, are sharply higher compared to a year ago.
Over the last three months, alfalfa and alfalfa-mixed grass hay prices have gone up $20/ton, per month vs. mid-summer prices, Barnhart says. "In Iowa, the biggest jump in hay prices are in the dairy quality and other top-third quality ranges. There is an increase of medium quality hay that goes to beef producers, but not to the extent of dairy quality hay," Barnhart says.