Increased beef and dairy production and strong horse inventories are among the reasons this is a good time to be a hay seller, says Thomas Morgan.
“The market is demanding more hay,” states Morgan, of Morgan Consulting Group Ltd., Olathe, KS. “I call it an agricultural star with a bright future.”
Morgan, the founder of the Internet-based business Forage.com, spoke at a recent commodity price outlook meeting at South Dakota State University.
He says the demand base for hay continues to grow, with demand for hay relative to corn at record levels and hay acreage now exceeding that of all other crops except corn and soybeans. Hay prices are at record-high levels relative to corn in many places.
But Morgan says the forage industry faces many crucial issues, among them biotechnology. Alfalfa produced more net energy per acre than did corn in the 1920s and 1930s, but corn took the lead in the 1950s.
“Today alfalfa produces 60% less net energy per acre than corn does,” Morgan points out.
In his view, that's probably why feed-grain production has continued to increase since the 1970s.
“Another way to put it is that forages have lost market share.”
Morgan believes biotechnology can help forage breeders produce better forage crop varieties that are herbicide-resistant, highly digestible or have other advantages such as high concentrations of certain nutrients.
He adds that horse owners continue to provide a valuable niche market for hay across the nation. But hay harvesting equipment isn't always designed with that market in mind. Small bales weighing about 40 lbs might become commonplace if hay producers can demonstrate to equipment makers the importance of the horse market, says Morgan.