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Hay prices 'talk of the town' in drought country

John Walter 07/13/2012 @ 9:21am

Bob Scharf, an auctioneer and one-time farmer, lives in north central Indiana, within one of the red zones of extreme drought identified on the U.S. Drought Monitor this week. Corn and soybeans in the area are withering by the day, he says, and so are the hay fields and pastures. Forage prices have skyrocketed.

Last week Scharf watched as the Hillsdale auction in southern Michigan where he works sold small square bales of hay for $12.20, a record for the long-standing auction.

“It’s the talk of the town,” Scharf told Agriculture.com.

Prices  at the Historic Hillsdale auction started the spring at about $4.50 and rose to $5.50 in early June, says Ken Frecker, also an auctioneer at the facility. “The heat and drought took a toll here over the past four weeks,” he said. “Saturday in the 107 degree heat wave was when we hit the record.”

Farmers are having a tough season,” Frecker said. “Those growing crops need rain, those feeding livestock need hay. Call it a rock and a hard spot.”

The prospects for the rest of the summer aren’t good either, Scharf says. “We haven’t had any rain in a long time. I don’t think there’s going to be a third cutting here. There’s just not anything to cut,” he said.


Ron Lemenager, Purdue University, livestock specialist, wrote recently that “first cutting hay yields were reduced 30-70% in Indiana.  “Dry weather in May and June added stress and set the stage for poor regrowth. Hay supplies across the region are in short supply and if hay can be found, it is expensive,” Lemenager said.

Internet sources in Indiana indicate sales in the $200-250/ton range, with some sales going to $300 or higher for quality small square bales.

“We have hay in this area that is reaching $350 a ton," a Michigan farmer told Agriculture.com’s Marketing Talk forum.


The hay shortage is resonating across the Midwest. In Illinois, Department of Agriculture sources reported this week that the “earlier start to hay feeding season has buyers making calls and asking prices to start to organize their hay needs.”

The higher range of prices in Illinois this week fell in the range of $200-240 for premium big squares, and $140-$160 for big rounds.

Nationally, forage conditions are rapidly deteriorating. In its weekly report for the week ending July 9, USDA rated exactly half of U.S. pasture and range to be in poor or very poor condition. That compares with 43% a week ago.

In Indiana, 81% of pastures are rated poor-very poor. In Arkansas and Missouri, things are even worse with 85% and 87% poor-very poor ratings, respectively.


Livestock and forage specialists are offering advice to producers suffering through the drought, recognizing that road ahead will be challenging for many.

“Unfortunately, there are no cheap, easy fixes for producers that have both short pastures and limited hay supplies,” Lemanager and colleague Keith Johnson, Purdue forage agronomist, wrote recently.

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