Content ID

281785

2019 Midwest Hay Market Issues Snowball

Prices supported by long winter.

DES MOINES, Iowa -- The U.S. hay market issues continue to pile up, much like the snow that keeps hitting the Midwest.

And with bitter cold temperatures in the cattle-feeding states forecast the next 10 days, there is no relief in sight for the demand of hay nor the transportation of it.

Hay Demand

Cattle producers who grow their own hay are chewing through their supplies with this extended winter weather. In addition, sellers of hay are having a hard time hauling hay to where it needs to go to.

Paul McGill, Rock Valley, Iowa, Auction Company, says the hay market faces quality, transportation, and price issues this winter.

“Weather has been a big factor the last six weeks. It has really limited the movement of hay,” McGill says. We’re only selling 50% to 60% of our normal volume of hay. The snow and the bad roads make transporting hay very tough. Plus, this cold weather causes the consumption of hay to go up.”

McGill adds, “We truck hay, too. The conditions are just not fit to get hay down the road and in and out of the fields. So, demand for hay is picking up as supplies tighten, with this year’s harsh winter lasting so long,” McGill says.

Kerry Knuth, a Meade, Nebraska, grain and hay producer, says that he is getting calls for hay from as far away as Pennsylvania.

“There’s good demand. We’re selling good-quality alfalfa and bales that have a mix of grass and volunteer corn,” Knuth. Plus, we’re all sold out of stored cornstalks. We have some more cornstalks that are still in the fields, but getting to them this winter is really tough.”

In Missouri, a state hay market spokesman, choosing anonymity, says two consecutive spring droughts beginning in 2017 had that state’s cattle producers entering this winter with already tight hay supplies.

Thus, the long winter has compounded the problem.

“When our producers are short on hay, they’ll buy from Oklahoma, Kansas, and some from Iowa,” the Missouri spokesman says.

In the fall of 2018, Missouri’s hay crop was tremendous, with plentiful rain. That helped the supply picture.

“But this long winter has some producers feeding range cubes trying to get by. With the accessibility to fescue, many Show-Me state cattle producers, in a normal year, won’t have to feed a full ration of hay until Christmas,” the hay market expert says.

However, this year’s fescue crop didn’t grow as well last summer, leaving producers short of winter feeding options.

“It’s been a long feeding season. And this winter we have had several snowfall events. A lot of producers are just trying to maintain the feeding habits of their animals, because putting on weight has been a tough task,” the Missouri spokesman says.

Hay Quality

McGill’s northwest Iowa hay auction company deals mostly in round hay bales weighing 1,500 pounds.

Specifically, the shortage of high-quality hay is the larger issue, this year, due to poor weather that hit the hay growing season last summer and fall.

“Last summer was a wet one. There was pretty good quantity of hay produced, but the quality was low from the wet conditions for baling,” McGill says.

The 2018 hay market, started out with a lot of hay selling. Generally, at grain harvesttime hay prices dip, but not last year.

One of the reasons the hay market held up was that calves were entering the feedlots in the fall at a slower pace. This delayed movement of calves supported hay prices. In mid-January, the weather factor kicked in, pushing up prices.

“Under normal circumstances, the January-February hay market is a down market. This year, the market is holding steady and even higher at times,” McGill says.

Hay Prices

With many states that were faced with wet growing conditions in 2018, the quality of the alfalfa being sold this winter is generally low.

However, due to the long winter, big round bales are selling for $20 to $30 per bale more than a year ago, the Iowa auction owner says.

“Midquality alfalfa hay is selling between $135 and $155 per round bale, while grass quality hay is worth between $125 and $145 per bale,” McGill says.

Knuth says that his customers are paying $120 per 1,500-pound round bale for good-quality hay. The mixed-quality hay is selling for $90 per round bale.

In Missouri, a round bale of average-quality grass hay was selling for $70 to $80 per round bale in August, which is double the normal price. A 1,500-pound square bale sold for $125.

“And those prices haven’t eased up much. They have dropped a bit due to a lot of lower quality hay that is on the market. To be honest, a lot of it is just a step above worth putting in a ditch,” the Missouri hay market spokesman says.

Hay Outlook

The problems for the hay market could stretch into the spring, McGill says. Officials in the Dakota states and Minnesota, large hay suppliers, will be posting new truck weight limits.

“So, just as we warm up, the issue of transporting hay will be aggravated, with lower truck weight limits on secondary roads. There are not many hay fields on the main roads,” McGill says.

Going forward, the hay market could be supported by two fundamental factors. One is the fact that a current shortage of cornstalks may force the cattle industry to chew through more low-quality hay.

Second, it’s typical than once the warm weather arrives, the hay market generally drops.

However, snowmelt and a wet spring could create more muddy road and field conditions, underpinning this year’s hay market.
 

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