Prices have been moving sharply upward at Upper Midwestern hay auctions in recent weeks, reflective of fears that hay will become scarce as drought spreads. What’s more, price runups may just be getting under way, say auction managers.
“People are getting pretty nervous,” says Carl Shirk, owner of Fort Atkinson Hay in Fort Atkinson, IA. “They’re not sure they’ll be able to find hay when they need it. They’re anticipating higher prices, so they’re buying now.”
At one sale earlier this month, Shirk reports, a load of third-cut, top-end dairy alfalfa in large square bales sold for $285/ton. “The seller was one of the few guys in this area who will get a third crop this year,” he says.
Another load, of second-cut alfalfa also packaged in large squares, brought $240/ton. Large round bales of grass hay brought $150-165/ton. “Alfalfa hay prices are running about $125/ton higher than they were a year ago at this time, while grass hay prices are about $90 higher,” says Shirk.
Even so, he believes there’s still room for higher prices in weeks ahead. “It’s not going to get any cheaper for a long while. At the same time, though, there is an upward limit to how much buyers will pay. It could get to the point where sellers can price themselves out of the market because people can’t afford to pay that much.”
The story is similar at Dakota Hay Auction in Corsica, SD. Owner Willy Groeneweg reports that dairy-quality alfalfa in round bales brought $200-225/ton at sales earlier this month. “A year ago at this time, hay of the same quality was bringing $120-130/ton. That’s quite a turnaround.”
Crowds at the weekly sale have grown recently, and, as demand increases, buyers are coming from farther away than the usual 30-mile radius of Corsica, he says. Cow-calf producers have been the hot buyers.
“They want to make sure they have enough hay to get them through the winter. The feedlots haven’t been as active yet. They’re waiting to see if prices come down a bit.”
Hay prices are also “up quite a bit” at the Historic Hillsdale Auction in Hillsdale, MI, says Ken Frecker, auctioneer and owner of Ken Frecker Auctioneers, Inc. He reports that 50- to 70-lb small squares of alfalfa have been selling for $6-9/bale in recent weeks. That’s up from $4.50-5.50/bale just a few months ago. At the July 7 sale, a load of alfalfa small squares sold for $12.20/bale, an all-time record.
While more buyers are attending the Hillsdale auction compared to what’s normal for this time of year, the amount of hay offered for sale has been down slightly. “We just haven’t had any rain and things aren’t growing,” says Frecker. “Some people who have hay are holding on to it because they think they’ll be able to get more money for it later.”
The Fort Atkinson Hay auction is held on Wednesdays year round. Sales begin at 1 p.m. For more information, call 563-534-7513 or email forthay@acegroup.cc. Year-round Dakota Hay Auction sales are held on Mondays with a 1 p.m. starting time. Call 605-946-5002 or email dakotahayauction@yahoo.com for details. At the Historic Hillsdale Auction, sales begin at 11:30 a.m. every Saturday. To learn more, call 260-748-7744 or email freckerauction@yahoo.com.