Hay Market

[farmers_son]

I was checking out hay prices and came across the hay market reports for the U.S. states.

http://www.ams.usda.gov/mnreports/lswnwcomm.pdf

To me, those look like pretty strong prices for hay. Even fair quality rain damaged hay is $175 per ton in Idaho. Top quality hay for export is $200-250 per ton.

Contrast that with Alberta hay prices which seem to be about $55-60 per ton. I am thinking the fair quality hay in Idaho is $175 per ton is similar hay so that is quite a price difference.

With my limited knowledge about hay exports it seems to me that there is good opportunity to move Alberta hay into the U.S. I know timothy is grown in Alberta and exported but my impression is the U.S. has a much more developed hay export market. Which leads me to wonder why Alberta is not keeping up? I hear lots of talk of a cheap food policy but what about a cheap hay policy?

I may have to trade my round baler for a large square baler.

Present Alberta hay prices are too weak to keep acres in production. At these prices acres are going to be broke. Maybe the Alberta cow herd will have to eat barley straw and DDG.

[perfecho]

Would think the high prices in the US are due mostly to the drought stricken southern part.......may not be that high every year. Any historical prices?

[farmers_son]

I did find historical prices for the U.S. An excellent resource going back to 2006:

http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?startIndex=1&template=Tem plateW&page=SearchHayReports

I have heard of large squares from Alberta going down to Texas but apparently not enough to impact the hay market here. Alberta cattle producers may enjoy reasonably priced hay for this winter. It could be there are more bales than cows this year.

A good breaking disc can change that quite quickly.

Apparently the U.S. export hay market is Japan. See:

http://www.alfalfa.org/pdf/ExportHay.pdf

Canada should be more than competitive with the U.S. when it comes to growing hay. Yet Canada is a significant export market for U.S. cubes.

See:
http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sis11075

[wd40]

Their dairy market also survives on alot of bought hay.

[ASRG]

Hay at $175 ton equals close to 9 cents a pound. How many pounds does a cow require over the year?
I have always found about 35 lbs.(moderately decent grass hay) a day in winter for a dry cow? If raising a calf probably more?
But at 35 lbs. a day that is over $3/day or approx. $1150 a year!
That doesn't work to good. I would suggest the $60/ton hay price reflects economic reality.....the $175/ton doesn't?

[burnt]

Whose "economic reality", the hay grower's of the feeder's?

[ASRG]

Good question. I guess first off the cattle guy. Ultimately the hay guy?
If there is no market for that "cow type" hay, it won't be used by anyone.
I would think most commercial hay producers would be trying to hit the horse/dairy market, but the fact is it always doesn't get put up to those standards?

[farmers_son]

Maybe the question is whether the reality is in the U.S. or in Canada.

Could be my pricing information is wrong but if hay in Alberta is $60 per ton and hay in the U.S. is potentially worth twice that then why not sell the hay to the Americans and forget the cows? Take the winter off just like a grain farmer.

There must a reason why our hay prices are so much lower than south of the border. Sure there is the cost of getting the hay there but are there any other barriers to seeing more export hay trade occuring. If not there is a market opportunity in the U.S. just waiting to be taken advantage of.

[grassfarmer]

It's a free market F_S so go ahead and sell hay into the US if the trucking pencils out. I suspect it's a bit of the "grass is always greener" phenomena and I wouldn't be selling my cows on a whim based on a high hay prices in another country. I remember a while back you were talking about calving your cows out in the US so the calves would be more valuable. Like the anti-CWB types who quote occasional high spot grain prices at northern state elevators and dream that this is the price they will get for all their grain every year.
Why can't we be more realistic in our expectations and content with the possibilies that exist in our own areas?

[farmers_son]

I won’t be selling my cows on any whim. I have worked hard to build the herd and some way to keep the cows will always be found. I never said I would sell my cows but it appears a profit opportunity exists to sell hay south. And one has only to look at the declining cow herd numbers to know producers are selling their cows.

I am not sure if higher hay prices in the U.S. is an occasional thing. Hay prices appear to substantially higher in the U.S. most of the time. There must be a reason and it is more than freight.

The cattle industry in this country depends on a reliable, dependable source of forage for summer grazing and winter feeding. If the forage industry is not earning sufficient returns to maintain acres then that is a concern. The prices I see for hay in Alberta, dare I say it, are too low. While it may help the pocketbook this winter the longer term outlook would be expected to be higher hay prices and even hay shortages. The only question would seem to be which will decline faster, the cow herd or the hay acres. And if the hay growers who are left start selling their hay to the U.S. or other export opportunities open up for hay then the day of reckoning that is sure to come will arrive even quicker.

[farmers_son]

Just posting this for interest. The Texas monthly hay report for July:

Full text see:
http://search.ams.usda.gov/mndms/2011/07/AM_GR31020110729.TXT

AM_GR310
Amarillo, TX Fri Jul 29, 2011 USDA-TX Dept of Ag Market News

Weekly Texas Hay Report

Compared to last week: Hay prices firm. Trade moderate to active under good Buyer demand. Hay buyers are forced to fill hay needs in a drought stricken State. Thus, most hay buyers are forced to go out of their normal marketing areas or out of state to find hay supplies. Some areas of the state received minimal amounts of rain although not enough to end drought. The extreme heat continues to dry out any light amounts of rainfall. Fire burn bans are still in effect in most areas of the state. Livestock auctions in the state continue to run more than normal livestock receipts as ranchers and farmers are forced to cull or sell-off herds due to high costs feeds and diminishing stock tank water.

Prices for hay and pellets quoted per ton except where noted.

The state of Texas Department of Agriculture has the Hay and Grazing Hot Line set up for buyers and sellers; the number is 1-877-429-1998. The web site for TDA is www.tda.state.tx.us.

End of paste.

The report goes on to quote hay prices in the range of 100-250 per ton depending upon location. The lower priced quotes would not be fancy hay.

Check out the Texas Hay Hotline at:
http://www.agr.state.tx.us/agr/program_render/0,1987,1848_5410_0_0,00.html?channelId=5410

I see quotes there for round bales as high as $150 per bale. One quote $340 (I assume that was per ton).
The drought is described as the worst in Texas history which is saying something.

[grassfarmer]

"Hay prices appear to substantially higher in the U.S. most of the time. There must be a reason and it is more than freight."

Related to land values perhaps?

[smcgrath76]

A couple of points/questions...
Hay is not hay. Is the US market
demanding higher quality hay for some
purpose or are we talking beef cattle
hay?
Are the cowherd economics different, or
is the hay heading to different end
points?
Hay may end up in shortfall and the
price will go up, and then people will
put hay into production...how is that
any different than any commodity
including the cattle cycle? If the
timing works out that hay is low when
cattle are high, that is just a bonus
for one of the players in the
marketplace. I agree that a lot of hay
ground is being turned under, but a lot
of cows are still hitting the hook as
well.

[ASRG]

Hay should be considered as just another crop. It needs to compete with wheat and canola.
I have a fairly close neighbor who is a large commercial hay producer. His target is for Asian export, followed by US export to the race tracks, then domestic horse supply, and finally the Alberta cow trade. In the first three markets he makes money.....in the cow trade it is little more than salvage value.
And yet how many cattle farms produce hay for their own use and put a value on it that may be realistic, or may be totally unrealistic? If (and this is a big if) my hay is worth $175/ton, should I be feeding it to cows? If I can grow wheat and canola that net me a much larger return than hay wouldn't that be the thing to do?
Hay at $60/ton...is that sustainable when compared to a cereal/oilseed rotation? I don't think so.

[kato]

$175 a tonne works out to $95.45 for a 1200 pound round bale. We have a 30 acre field of alfalfa/brome that produced 207 round bales on the first cut, and looks like it will be running around 85 bales on second cut (10 acres left to go, and already have 60 bales). This means that if one could actually get such a price, and that's a big if, this field would have made $27,968, or $932.00 per acre. The only cash expense would be twine and fuel. There's a pretty good cushion to pay for that. We don't fertilize, just spread manure, and the stand is at least 12 years old, so the seed was paid off a long time ago.

As bad as the crops in this province are, that's how good the hay has been. If you didn't get so much rain last spring that it drowned out, it's been a spectacular year for hay. And all baled with no rain either!

Now, could someone please give me the name of whoever would pay $175.00 a tonne for hay??????