Pacific Northwestern (PNW) hay growers catering to beef-cattle operations in the western U.S. could find good marketing opportunities over the next several months, according to a June 30 Hay Market Snapshot Report from Northwest Farm Credit Services.

Pasture conditions have improved in most of Montana, but beef producers will likely seek additional hay as they rebuild stocks, the report notes. In parts of Oregon and Idaho, forage shortages and dry conditions continue to plague cattle ranchers. That means demand for feeder-quality hay is likely to get a boost this summer. In the mid-section of the country – South Dakota, Nebraska, Colorado, Kansas and Oklahoma – persisting drought conditions could also increase demand for hay coming out of the PNW.

The demand picture is slightly more unsettled in the region’s dairy sector. With milk prices improving during the first half of 2013, most Northwestern producers are now profitable. That’s increased the demand and prices for higher-quality hay in Idaho.

The story is different in California’s milk-production industry, another major market for PNW hay. There, dairies continue to experience weak profit margins due to limited milk-price increases and high feed costs. “Markets for alternative feeds will also influence dairies’ decisions and, ultimately, hay prices in 2013,” reads the report. Corn prices fell following USDA’s June 28 corn stocks and potential production report. “Lower corn prices are likely to pressure hay prices down.”

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