TULARE, Calif.–Hay prices should ease this year for producers in the Western states.
That’s the word from Seth Hoyt, hay market analyst, who spoke at World Ag Expo on Tuesday.
While lower hay prices might be viewed with optimism, there is also an element of pessimism in Hoyt’s prediction. One of the reasons why hay prices will decline is because dairy producers won’t be able to afford as much.
“I have lowered prices based on what’s going on in the dairy industry,” Hoyt said. “Right now, we are just producing too much milk,” he said, which is causing lower milk prices.
When dairy farmers experience economic difficulty, it becomes a problem for hay growers. Dairies are the main customer for hay in the West, and "a lot of dairies are going into a negative cash flow situation," he said.
Hoyt now estimates the price of first-cutting supreme alfalfa dairy hay, delivered, will be $260 to $270 per ton in central California this year and $210 to $220 per ton in Idaho. Again, that is a first-cutting hay price and not intended to cover the entire growing season.
In recent months, central California producers have had to pay upwards of $325 per ton, delivered, for quality hay.
In the eight-month period from early July 2010 to early March 2011, the price of hay from the Imperial Valley of California increased by $140 per ton, he said.
Hoyt projects that hay acres in states such as California, Idaho, Nevada and Arizona will be up 3 to 5 percent this year compared to 2011. Yet, even with increased acres, there won't be an abundance of hay, he adds.
“As a result of high prices and the smaller supplies of alfalfa hay, dairymen have started feeding less alfalfa hay in their dairy rations,” he said. In 2010, producers in California fed their milk cows 11.15 pounds of hay per cow per day, on average, and that dropped to 8.6 pounds in the third quarter of 2011, he said.
One dairy in Idaho, he said, was feeding 14 pounds of hay in its ration last summer, but now is at 7 pounds. Meanwhile, the dairy increased corn silage from 45 pounds to 65 pounds per cow per day.