Hay movement remains sluggish in many parts of the Midwest, making it difficult to come up with an accurate assessment on where prices could be headed as the winter feeding season approaches. So say managers at some of the region’s high-profile hay auctions.
“In seven out of the last 10 years, we’ve seen a price rally right after Labor Day,” reports Paul McGill, owner of Rock Valley Hay Auction in Rock Valley, IA. “This year, that didn’t happen. It seems like everything is a month behind. Our normal spring rally usually ends in mid-May. But this year, the rally continued well into June. Maybe we’ll see a fall rally yet.”
McGill notes sales activity in his area dropped off considerably in the last two to three weeks. “Right now, everyone is focused on getting their row crops off the field,” he says. “Moving hay around has been put on the back burner.”
He thinks buying activity could be picking up again among local and regional dairy producers looking for high-quality alfalfa. “They were extremely aggressive in their buying throughout the summer and that held prices up,” he says. “As we got into the fall, a lot of them were sitting on good supplies and activity dropped off. Some of them are probably ready to get back into the market now.”
In the eastern part of Iowa, dairy producers have been actively buying this fall, keeping premium hay prices high, reports Bob Humpal, owner of Fort Atkinson Hay. “Prices have been higher than normal for this time of year,” says Humpal. “Premium alfalfa in small squares has been selling for $200-280/ton. From what we see, the supply for that kind of hay is still tight and prices will stay up there.”
The outlook is not likely to be as promising for producers looking to sell medium- to average-quality hay. “We’re certainly in an oversupply situation for that kind of hay,” McGill says. “There’s also a question about how many calves will be going into the feedlots. Up to this point, they haven’t been coming in at a normal pace at all. If that continues, it will affect the market for hay through the winter and into next spring.”
Brian Schneider, Pipestone Livestock Auction Market in Pipestone, MN, offers a similar assessment. “There’s just a world of hay in our area,” he says. “At the same time, we’re seeing a lot of the cow-calf guys and guys with stockers exit the business. A lot of them have decided they just don’t want to deal with high grain and hay prices anymore. At a certain point you have to ask just who is going to be buying all the hay that was put up.”
Schneider reports grinder-quality hay in his area is currently bringing $90-120/ton, while medium- to good-quality hay fetches $120-150. High-quality hay is bringing $150 and up, off from a high-water mark of $230/ton or so last spring.
At the Sauk Centre Tested Hay Auction in central Minnesota, marketing activity is slower than it was a year ago, says Al Wessel, auctioneer for Mid-American Auction Co. Since the auction fired up for the current season in mid-September, an average of 60-65 hay loads have been offered at each of the twice-monthly sales. Last year, the average was closer to 90-95 loads per sale date. “But last year was an exception,” says Wessel. “Hay was in short supply and demand was extremely high. This year, what we’re seeing is more like what we’ve seen over the five or six years before last year.”
Wessel notes top-flight dairy hay at Sauk Centre is bringing $150-200/ton, while average- to good-quality hay is selling for $130-150/ton. “The real good hay is actually selling better than a lot of people thought it would with milk prices dropping,” he says. “People need to be realistic. You can’t have $300 hay when you have $15 milk. ”
A better read on where prices are headed will likely emerge in late November or early December, Wessel adds. “That’s when buyers start getting serious about assessing what their hay needs will be for the winter. They’ll also be thinking more about taxes and deciding whether it might be a good idea to buy several loads of hay before the year ends.”
Auction times and contact information include: Sauk Centre Hay Auction, 12:30 p.m., first and third Thursdays of each month from September through May. Visit www.midamericanauctioninc.com or call Wessel at 320-547-2206. Fort Atkinson Hay, every Wednesday at 1 p.m. Visit www.fortatkinsonhay.com or call Humpal at 563-534-7513. Rock Valley Hay Auction, 12:30 p.m., year-round Thursday auctions, November through April Monday auctions. Go to www.rockvalleyhay.com or call McGill at 712-476-5541. Pipestone Livestock Auction Market 11 a.m. on Tuesdays. www.pipestonelivestock.com or call Schneider at 507-825-3306.