Hay Shortage Grows, Prices Nearly Double
DES MOINES, Iowa -- As winter storms continue to pound the upper Midwest, cow/calf and feedlot operators are running out of hay to feed their animals.
With snow stunting the growth of spring pastures, the depth of the hay shortage that started in the drought-stricken fall of 2017 has been exacerbated.
Usually cattle farmers can kick animals out to pasture May 1, but that will not be the case this year.
So, the need for hay is extending further into spring than normal.
Paul McGill, owner of Rock Valley, Iowa, Hay Auction Co., sells hay to buyers in Iowa and Minnesota. “We need winter to get over soon,” McGill says.
McGill says the tight supply of hay started with last year’s drought in the Dakota states and Montana.
“We get a lot of our hay from those states. At the beginning of the summer drought, it didn’t hurt us too much. But the ranchers out there started thinking ahead, knowing that they’d need the hay feed later, so they held on to the hay they had. That started dwindling the hay that was coming to us in Iowa,” McGill says.
About Christmastime, the ranchers out West became more aggressive in buying the hay in the region, McGill says. “That took our supply away. Since the first of this year, the hay supplies have been short, and prices started to rise.”
In addition to shortages, February’s cold weather and muddy conditions have made transporting hay miserable, McGill says.
“We’ve been shorting our buyers for a few months now, and that has changed the structure of supply,” McGill says.
In Missouri, although horse farmers are screaming the most, due to a shortage of high-quality alfalfa, some cattle operators are already taking their animals to market due to a lack of hay to feed, according to a Missouri Department of Agriculture spokesperson.
“The hay feeding season has lasted so long that those with hay are holding onto it, leaving the ‘have-not’ guys short,” the Missouri Department of Ag spokesman says.
He added, “This situation could be over in a week, if we return to normal April weather.”
As of Sunday, Missouri’s hay supply was rated as 51% adequate to surplus, 38% short, and 11% very short, according to the USDA/NASS weekly report.
On May 1, the USDA will release its biannual Hay Inventory Report.
“This year’s May 1 report will be very interesting, considering we have been drawing down supply quite a bit,” McGill says.
Hay Prices Surge
Of course, this a supply/demand story right now for the hay market.
Large round bales of hay are selling for $75 to $90 per ton higher than a year ago, McGill says.
Specifically, alfalfa-grade hay bales are priced between $140 and $165 per ton, while grass, midquality hay bales are selling for $125 to $150 per ton.
This week’s blizzard cut McGill’s northwest Iowa auction company’s sales of hay that it does have to offer.
“On Monday, we moved only 14 semi-loads of large bales vs. 92 semi-loads a week ago. Since the first of the year, we have seen sales below average,” McGill says.
There is some hay around, it is just hard to get to it, he says.
In Missouri, 1,500-pound large round bales of hay are selling for $140 per bale vs. $80 in an average year.
In Nebraska, midrange-quality hay is priced between $100 and $130 per ton with some markets as high as $145, compared with average prices of between $70 and $90 per ton, according to the Nebraska Alfalfa Marketing Association.
Hay Market On Steroids
The hay market experiences a rise in prices, on an annual basis in late March and April, due to a general drawdown of supplies from winter feeding. Yet, operators know that the first cutting of hay arrives in early May, creating a normalizing of prices.
“But this year, the late spring is adding fuel to the hay shortage, pushing up prices even higher," McGill says.
Because the hay baling season will be delayed, this year’s spring price surge will last until July 1, McGill says.
“Most buyers want that fresh hay to cure a little bit, before they grind it to feed from,” McGill says. "So the price rally will extend into summer.”
To deal with a shortage of hay, some cattle operators have been thinning their feed-rations and supplementing with cornstalks.
“We are lucky there were a lot of cornstalks baled last fall,” McGill says. "At the time, it was more than we needed. But now, we really can use those bales.”
Normally, after March 1, there is very little interest in cornstalks and straw bales. “That is totally different this year, too,” McGill says.
McGill adds, “Once we get out of the mud and cold season, we will have more supply available, McGill says. But then, when it dries up, farmers with hay to sell will be getting in the fields to plant corn.”
Barb Kinnan, executive director of the Nebraska Alfalfa Marketing Association, says the hay industry is facing multiple supply issues right now.
“To start with, the first cutting of hay is ready May 10, but not this year,” Kinnan says. “Plus, because a lot of guys have gotten out of the hay business, due to recent droughts, we have fewer hay producers. This could extend the hay shortage.”
The latest weather models indicate the 30-day weather forecasts keeps Nebraska’s temperatures below normal.
“Hay is hard to come by, and the weather is making it worse,” Kinnan says.