Will he get more profit selling his hay to dairymen or to beef producers? That’s what Roger Black asks himself this time each spring as he plans his yearly business strategy. This year, the hay grower is betting on a dairy-industry comeback.
“It looks to me like the dairy sector is in for a pretty good year,” says Black, who puts up 3 x 3 x 8’ bales of alfalfa hay on 300 dryland acres near Arkansas City, KS. “The futures prices for milk are on the upswing, and there are some large dairies making plans for expansion. That’s a pretty good sign.”
Last year was a different story. “A lot of dairies were really struggling financially, and some of our customers were having troubles paying their bills.”
That led Black to focus on producing hay that “would work” for the beef-cattle sector. “It was mostly a matter of stretching out our baling interval by about a week,” he says. “Instead of cutting every 28 days, we were cutting every 35 days. We didn’t ship a single load to a dairy this past year.”
He’ll return to the shorter harvest interval this year and figures about 60% of his alfalfa production will end up on dairies from south-central Kansas to the East Coast. The rest of his hay will go to the horse market – breeders, performance-horse stables and pleasure-horse owners – and to beef-cattle backgrounders in Oklahoma.
This year’s crop is getting off to a slow start, he says. “It’s nowhere near ready. We had an early spring last year, and we were able to start cutting on April 20.” May 10 is a more typical starting date in his area, but that may be delayed to May 20 this year.
Black, who also grows prairie hay, bromegrass and sorghum-sudan grass for a variety of markets, sees some potential price glitches in store for 2013. “Just look at the commodity markets. Prices have been collapsing for corn, soybeans, feeder cattle, gold and oil.”
While hay won’t be immune to a price drop, he says, a sharp nosedive isn’t likely either. “Crop insurance will drive a lot of acres to corn and beans. That means we likely won’t have burdensome supplies that could weigh down hay prices.”
“The market probably won’t be as good as it was this past year. But it will still be a good market. Prices will be at least good enough to pay us for our work.”
To contact Black, call 620-442-1943 or email email@example.com.
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