The market rally for hay prices that usually occurs in mid- to late-October in northwestern Iowa has yet to arrive, reports Paul McGill, owner of the Rock Valley Hay Auction in Rock Valley. “We had a mild rally in early September, with prices coming up about $10/ton. But since then, the market has been in a holding pattern. We’ve had steady demand, but nothing extraordinary by any means.”
Several factors are likely at work, McGill says. “A lot of people are wrapping up their fall field work. They’re still in the harvest mindset and aren’t focusing on buying or selling hay.”
Spiking grain prices could also be coming into play. “Feedlot people are nervous about high corn prices, and they’ve been reluctant to bring a lot of cattle into the yards. They just don’t know what’s likely to happen. That uncertainty hurts grass hay sales.”
Exceptionally mild weather in October is also holding a lid on sales to feedlots. “The nice weather has saved feeders a month of feeding hay already. Hay consumption is down, and conversion rates are up. The cattle haven’t had to stand out in the mud yet.”
To date, the prices for the bulk of grass hay sales have been in the $70-80/ton range. “Some of it has been selling for as high as $110/ton, but that is for very nice hay,” says McGill. Alfalfa grinding hay has been selling for $75-90/ton. A top-quality dairy-hay price has yet to be established.
McGill still expects a late fall price rally before the end of the year. “Winter has to start pretty soon. Once we start getting some winter weather, we’ll see some more activity.”
With the start of the new year though, McGill expects more hay to come on the market. “A lot of growers could be holding off on selling now for tax reasons. Once they start selling, it will bring the market down barring some kind of major weather event.”
Overall, it’s going to be hard to hold the market very far into 2011, he says. “There’s an incredible amount of corn stalks being baled up to go along with all the low- to medium-quality hay that was made this summer. That can’t be good for hay prices.”
Auctions at Rock Valley Hay Auction are held on Thursdays year-round. From November through April, sales are also held on Mondays. All sales start at 12:30 p.m. See the latest sales results.
To contact McGill, call 712-476-5541 or email PaulM@rockvalleyhay.com.
High-quality dairy hay will likely be difficult to find in the state this winter, says Mylen Bohle, an Extension agronomist with Oregon State University based in Central Oregon.
The growing season got off to a rough start due to a cold spring and a lengthy, untimely rain that delayed first cutting in many areas for two to three weeks, he notes. “About the time people started in on first cutting, we ran into a stretch of rainy weather. A lot of down hay got rained on, and a lot of the hay that was standing when the rains started didn’t get cut until it was past high quality.”
“The rains came back at the end of the season when growers were taking their last cuttings (either third or fourth cuttings depending on location). Quality overall was not good for the year, and yields are down a bit.”
Even though supplies are likely to be on the short side, top-quality (premium-supreme) alfalfa in the region is selling for around $150-170/ton at the stack, roughly the same as year-ago prices. High-quality grass hay is selling for $160-180/ton. “Even if dairies can find the quality of hay they need, there’s still the question of whether they’ll be able to afford it. A lot of them still haven’t turned the corner after a tough couple of years.”
Given the 2010 weather challenges, Bohle says he wouldn’t be surprised to see more Oregon alfalfa acres plowed under this fall and next year. “Grain prices have been high and are maybe headed higher. That is going to provide an economic incentive to rotate out of alfalfa for some growers.”
Input costs could also come into play. “Fuel and fertilizer prices have come down a bit off the spikes of a few years ago,” says Bohle. “But they haven’t come down nearly as far as hay prices have. Some growers are feeling squeezed.”
To contact Bohle, call 541-447-6228 or email email@example.com.