Ongoing expansion in the organic dairy industry spells good times ahead for organic hay growers in the western U.S., says Lou Anderson, an organic feed broker from Fairfield, ID.
Orders for organic hay produced in southern Idaho have been building steadily in recent months, notes Anderson, president of S&L Commodities. "We're on par for a 50% increase in sales compared to a year ago."
As demand continues coming back, Anderson says, organic hay growers will begin seeing larger premiums for their product. Prior to the dairy industry's near-collapse in 2008, the premium price for organic hay compared to conventional hay was typically 10-15%, sometimes as high as 25%, he says. "In the last couple of years, though, the premiums have been basically non-existent. I'm not sure that we'll see the kind of premiums that we saw back in 2007, but they will be there at some level as demand grows."
A pickup in organic dairy product sales, due mostly to improvement in the general economy, has led organic dairy producers in his trade area to build cow numbers, adds Anderson, who markets to customers in southern Idaho, Colorado and Texas. "If prospects for better sales weren't there, they wouldn't be expanding."
An overall hay supply shortfall in the region should also benefit organic producers along with their conventional counterparts. "Almost everybody is out of hay," he says. "There's almost none to be had. That should have an effect on all prices."
To reach Anderson, call 208-539-2245 or email loua@frontier.com.