Strong demand, coupled with limited supplies, continues to hold hay prices on the high side at regularly scheduled hay auctions in the Upper Midwest.

Buyer numbers have held mostly steady. But the average 75-80 loads coming into weekly auctions at the Shipshewana (IN) Auction & Flea Market this year is off slightly from the year-ago number of roughly 90 loads, says livestock manager Keith Lambright.

 “We had a pretty tough year for making hay here last year,” he says of the low supply. “It seemed like it rained just about every day during the growing season. Also, a lot of hay ground was plowed up for corn.”

At $125-200/ton, auction prices for alfalfa and good soft-grass hay are significantly higher than they were a year ago. “The really good stuff has been bringing $200-250/ton. Last year, we didn’t see $200/ton very often.”

Compared to year-ago figures, the number of loads coming into Fort Atkinson Hay’s weekly auction, Fort Atkinson, IA, has increased by 5-10% so far this winter, averaging about 80 loads/sale. An early February sale, however, offered 95 loads, reports auction owner Carl Shirk.

Nearly all of the hay is coming from local sources, he adds. “In past years, we’d get some hay out of the Western states and the Canadian provinces. We’re not seeing that this year. The supply is tight everywhere. People have been able to find a market closer to home.”

Strong demand has brought in new buyers throughout the winter. “The turnout has been good,” says Shirk. “People are coming from a little farther away than usual. It seems like every week there are one or two new faces in the crowd.”

As of early February, premium alfalfa packaged in small and large square bales was bringing $185-225/ton, up roughly $50/ton from the year-ago price. Round bales of alfalfa and alfalfa-grass mixtures have been fetching $110-145/ton, up $25-30 from 2011 prices. Grinding/utility hay has also been bringing good prices of around $75-80/ton. “A limited supply of good bedding material in the area has helped hold that price steady,” says Shirk.

At about 50 loads/sale, the volume of hay moving through the twice-a-month, quality-tested auctions at Steffes Auctioneers in Litchfield, MN, is holding even with last winter’s, reports auctioneer and hay-and-livestock specialist Randy Kath.

Along with hay from central and northern Minnesota, the auctions have been drawing loads out of Manitoba. “We haven’t been getting as much out of the Dakotas as we normally do,” he says. “Buyers from Texas and Oklahoma were active there early and a lot of hay was either spoken for or sold very early on.”

Hay sold at the auction is moving farther for delivery this year. “We’ve got hay going in every direction,” says Kath. “A lot of our alfalfa and dairy-quality hay is going to Iowa, Illinois, Wisconsin and Indiana. For mixed hays, we’re sending a lot of volume to Indiana and Ohio. The grinder/utility hay has been making its way to Oklahoma and Texas. People there will take about anything as long as it’s palatable. They want to get it for as low a price as possible because of the freight costs.”

For the most part, prices have been running well above 2011 levels. In recent weeks, premium alfalfa hay has been bringing $250-275/ton, up $75-100/ton from year-earlier numbers. The market could still go higher. “Supplies are really dwindling on the prime alfalfa,” he says. “I don’t think we’ll see the peak on prices until sometime in March.”

“Fancier” mixed hays, mostly alfalfa-orchardgrass, have been selling for up to $200/ton. Last year, Kath notes, the price for that type of hay topped out at $150/ton.

Lower-end grass hays, packaged in round bales, are actually selling for less in early 2012 than they did last year at this time. “We’ve been bombarded with that kind of hay this year,” he says. “There’s just so much of it out there.”

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