With hay stocks the lowest since 1957, according to USDA’s Crop Production report released this month, rising hay prices are all but a certainty in months ahead. The weather between now and the new crop will determine how quickly and how far prices will go up, says Katelyn McCullock, dairy and forage economist with the Livestock Marketing Information Center in Denver, CO.
“Much of the Midwest hasn’t received the moisture that’s needed to regrow and sustain all of the pasture that we lost last year because of the drought,” she says. “How much hay we have to keep feeding will determine how much higher hay prices go between now and May.”
McCullock expects most of the price increases will be in the grass-hay markets. Dairy producers probably won’t be able to handle significantly higher alfalfa costs, she says.
While new alfalfa seedings were up by 2.9% last year – the first increase since 2005, according to USDA, McCullock looks for a small hay-acreage increase this year. “With corn prices being high, I find it difficult to believe we’ll get any big increases in hay acres,” she says.
A return to more normal yields in 2013 would likely take some pressure off hay prices. But USDA estimated, for the 2012-13 marketing year, a national average alfalfa yield at 3 tons/acre, an 11% decrease from the 3.4-ton/acre average in each of the previous two years. The average U.S. all-hay yield in 2012 was just more than 2 tons/acre, a drop of 9.7% from the 2011 average. “Yield increases would be about the best thing livestock producers faced with high hay prices could hope for,” she says.