After a somewhat sluggish-to-steady fall, traffic has been increasing at Upper Midwestern hay auctions in recent weeks. “Compared to a year ago, the number of runs we had through here this fall was down substantially from a year ago,” says Dale Leslein, manager of the weekly hay auctions at Dyersville Sales Co., Dyersville, IA. “Typically, we’ll move about 1,000 tons/week through here. But for most of the fall we were averaging more like 300-400 tons.”
Declining hay acreage in the region over the past two growing seasons likely played a role, Leslein says. “Hay prices were pretty depressed and that caused people to flip a lot of acres into corn and other grain crops. We figure that somewhere around 70% of the hay growers using the auction either cut back or exited the business entirely in the past two years.”
In recent weeks, he says, sales volume increased as area farmers wrapped up fall fieldwork. Earlier this month, 800 tons were sold at a sale.
A short supply has kept upward pressure on dairy hay prices in the region, Leslein reports. At a sale last week, a load of 201 RFV alfalfa sold for $310/ton. “For hay testing 180 RFV or better, it’s strictly a seller’s market. Good dairy hay is bringing right at $1.50/point.”
He wouldn’t be surprised to see prices go up another $100-150/ton over the winter months. “We could be in that $400-450/ton range by spring.”
Unlike many other market observers, Leslein doesn’t believe resistance to escalating prices on the part of livestock producers is likely to be a factor in the winter market. “There’s just a lot of optimism in the livestock industry right now,” he says. “We’ve got tremendous cattle prices and a good milk price. High hay prices aren’t going to be much of a deterrent. People are going to be willing to pay for good hay.”
In northwestern Iowa, seller traffic has been running close to normal in recent months at the Rock Valley Hay Auction’s twice-a-week sales, reports owner Paul McGill. “The higher market is definitely attracting hay. And a lot of people are selling now while they can still get out with their hay.”
More hay out of the Dakotas has been showing up at the auctions in recent weeks, McGill adds. “There was a lot of hay out that way that didn’t get shipped south because it’s packaged in round bales.”
On the demand side, Nebraska feedlots have been active buyers at Rock Valley in recent weeks. McGill suspects the feedlots may be having difficulty sourcing hay because much of that state’s production this year has been sold to buyers in southwestern states impacted by drought.
Alfalfa prices across the board are running about $80/ton higher than they were a year ago. McGill is confident the market will hold through the first part of the year as long as the weather doesn’t take a major turn for the worse, resulting in the need for more hay. “A lot of livestock producers will have some tax reasons to try to get hay bought before year’s end,” he adds.
An average of 20-30 loads of hay have been up for sale at weekly auctions at Equity Cooperative Livestock Sales Association in Lomira, WI, this fall. “That’s pretty typical for this time of year,” says auction manager Kevin Johnson. “What’s noteworthy is that the number of buyers at the sale keeps increasing each week.”
Hay from Western states is not moving into the auction as it has in past years, Johnson notes. “In other years, we’d get phone call after phone call from Western dealers looking to shop the auction. This year, though, we haven’t taken a single call. With hay being in such short supply just about everywhere, they can get it sold a lot closer to home and probably for a lot better price.”
He’s not sure that the number of loads up for sale will increase in upcoming months – as it usually does during winter. “For December through March, we usually see about 50-60 loads of hay at each sale. This year, I just have a feeling that we’ll stay at that 20-30 loads/week level. People have been selling hay all year, and there isn’t that much left out there to sell. Some people will be leaving the auction without hay.”
For the same reason, Johnson expects demand to remain strong through winter, which will keep pressure on prices. He reports that alfalfa and alfalfa-grass hay has been bringing around $200/ton and over for most of the fall. “And there’s just as much demand for good grass bales as there is for straight alfalfa.”
At the Central Minnesota Quality-Tested Hay Auction in Sauk Centre, the number of loads has been “just a little off” from last year’s number, reports Al Wessel, auctioneer for MidAmerican Auction, Inc. “We’re just getting into our heavy season now. Typically, we’ll be getting about 100 loads a week through the winter months, and we should be pretty close to that this year.”
Demand and prices have held firm in recent months, Wessel adds. “On the very best hay, we’re seeing prices in the $225-290/ton range. That’s just a trigger higher than what we saw last year. We’re also seeing people giving a little more for a little less quality. That’s all due to a lack of supply. There just isn’t a lot of good hay out there.”
Auction times and contact information include:
Dyersville Sales Company, 11 a.m., Wednesdays year-round. Call Leslein at 563-875-2481.