Improved dairy margins have helped increase hay prices at Midwestern auctions in recent weeks.
Hay prices picked up at auctions around the Midwest as April drew to a close. The price upsurge was influenced by a cooler-than-normal spring in the region, fear of a growing-season drought in areas and better financial prospects for dairy producers, say market watchers.
At Dakota Hay Auction in Corsica, SD, prices across the board increased $15-20/ton over what they were the previous two weeks, says auction owner Willie Groeneweg.
A load of high-quality round-bale alfalfa topped the sale at $155/ton on April 28. The range on “good” alfalfa was $120-130/ton. “Even the poorer stuff didn’t get below $100/ton,” he says. “Just a few weeks ago, it was selling for around $80/ton.”
Concerns about a potential drought this summer are driving the price uptick, he believes. “We’re okay on the supply side for now. There are still quantities of hay around. But people are nervous about getting caught short. They don’t want to pay the high prices they were paying a year ago.”
Spring’s late arrival and strong milk prices pushed up dairy-quality alfalfa prices in recent weeks at the weekly hay auction at Dyersville Sales Co., Dyersville, IA. At the April 23 sale, reports auctioneer Dale Leslein, prices ranged from $280 to $360/ton. “That’s the highest it’s been in quite some time.”
Grass-hay prices spiked at the same sale, with “the better hay” in round bales selling for $100-120/ton. In early April, the price was as low as $60/ton.
“Last October, it was bringing $200/ton. But then the market for the low-end hay collapsed, mostly because there was just so much out there. Now, people are waiting on new-crop hay and new pasture. If they need hay, they’ll pay whatever it takes to get it.”
For the weeks ahead, he looks for the high-end dairy-hay market to continue to strengthen. “The dairy farmer is in an entirely different ball game right now,” he says. “Corn prices are down, and milk prices are way up. When you think about it, hay prices should have gone up a lot earlier than they did.”
The market for grass hay isn’t likely to stay strong as long. “As soon as we get some pasture, they could go right back down. Before we’re done this spring, I wouldn’t be surprised to see a very big price spread between the highest- and lowest-quality hay,” Leslein predicts.
Late-April prices also picked up at the Equity Cooperative Livestock Sales Association weekly hay sale in Lomira, WI, according to market manager Leo Amend.
Large square bales of dairy-quality alfalfa, weighing around 800 lbs each, brought $75-100/bale at Equity’s April 25 auction. “Before that, the market was tipping the other way for several weeks,” he says. “The market top was more like $70-90/bale.”
At the same sale, lower- to mid-quality plain grass hay sold for $45-55/bale, up from $35-40/bale at sales earlier in the month. “The cold weather we’ve been having is the biggest factor,” says Amend. “And the way it’s looking, people aren’t going to be out chopping any time soon. If that’s the case, this hay market could hold together pretty well through mid-May or even the end of May.”
For auction information, contact:
Dakota Hay Auction – Willie Groeneweg at 605-946-5002 or email@example.com. Monday auctions are held throughout the year, beginning at 1 p.m.
Dyersville Sales Co. – Dale Leslein at 563-581-5119. Wednesday hay auctions start at 11 a.m.
Equity Livestock Cooperative – Leo Amend at 608-434-4030 or firstname.lastname@example.org. Year-round Friday hay auctions start at noon.