The blast of cold weather that hit the Northeast last month might help heat up this winter's hay prices.
“The main factor affecting the hay market right now is the weather,” says Dave Petritz, Purdue University ag economist. “Typically, when we see severe winter weather, prices respond by moving upward as demand begins to pick up.”
Petritz encourages hay buyers in the Northeast to look in the Dakotas, Illinois, Indiana, Iowa and Nebraska to find hay at reasonable prices.
“According to published USDA reports, the mid-December price for alfalfa was $60/ton in North Dakota compared to $156/ton in Pennsylvania,” he says. “I don't know if you can move a ton of hay from North Dakota to Pennsylvania for $90/ton, but I bet there are truckers who would be willing to try.”
For the most part, hay sellers haven't seen the high prices that were forecast by some industry insiders last fall.
“We're seeing a situation of more hay, mild weather — with the exception of the Northeast — and prices that just don't have much oomph to them,” says Petritz. “But, if the cold continues in the Northeast and the jet stream settles farther south so the weather turns brutal in more states, prices are likely to move up.”
Other factors that could strengthen hay prices are the sharply increased cost of soybean meal and a stronger corn market.
“If hay prices improve, dairy producers will have to make some tough decisions this winter,” he says. “Fortunately, milk prices have finally started to rise, so they have a little more money to work with.”
USDA's January Crop Production report included details of the 2003 hay crop and Dec. 1 hay stocks.
Total hay production was estimated at 157 million tons, up 4% from the 2002 amount. Acreage harvested, at 63.3 million, was 2% smaller than the previous year's. The average yield — 2.48 tons/acre — was up slightly. (see chart)
“I think the January report reflects what people who were actually out in the field buying and selling hay were seeing,” says Petritz. “There's actually more hay in several areas than we originally thought because USDA's August and October production estimates reflected smaller increases in Indiana and sharp declines in the Great Lake states.”
Alfalfa production totaled 76.3 million tons, up 3% from the 2002 figure. Harvested acreage, at 23.6 million, was up 2%. Yields averaged 3.24 tons/acre, about the same as in 2002.
Growers seeded 3.12 million acres of alfalfa and alfalfa mixtures during 2003, 5% less than in 2002. But some states saw hefty increases. For example, Indiana growers seeded 50,000 acres of alfalfa in 2003, compared to only 25,000 acres in 2002.
Stocks of all hay stored on farms totaled 111 million tons on Dec. 1, 2003, up 7% from the Dec. 1, 2002, figure. Thirty of the 48 reporting states had higher hay stocks. Most states with increases are in the northern and central Rocky Mountain region, northern and central Great Plains, eastern Corn Belt, Ohio Valley and the Southeast.
Due to heavy rains last summer in parts of the Midwest, east through the mid-Atlantic region and south to Florida, quality suffered.
“Hay stocks are up, but it's not all the highest quality that's ever been harvested,” says Petritz.
One state with less hay is California.
“Alfalfa production was down 6% last year in California, in part because water for irrigation was in short supply,” says Petritz.
California's acreage was down because of depressed prices, adds Jack Getz, who heads USDA's Market News for Washington, Idaho, Oregon and California.
“And tonnage per acre was less because of a long, cool spring and warmer-than-normal summer temperatures,” says Getz, who's officed in Moses Lake, WA. “However, some of that production loss was made up in the fall, when improved haying conditions allowed for an extra cutting to be taken.”
To meet their needs, California dairy producers are pulling some high-quality hay out of Nevada and Oregon, he says.
“There are good quantities of dry cow hay available in the Imperial Valley. That hay used to go to the Chino area, which is near Los Angeles, but there aren't nearly as many dairies there anymore. Many of those dairies have moved to the San Joaquin Valley in central California or out of state.
“Prices for dairy-quality hay aren't moving much, but prices for hay on the bottom end have been moving up.”
The mountains in his region have been getting quite a bit of snow the past month or so.
“In terms of getting water for irrigation, everything's looking good right now for the 2004 hay crop,” says Getz.
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