Hay prices are expected to stay high for the coming year; producers should plan accordingly.
Drought and lower acreage are key factors
Production of hay, including alfalfa, across the top 18 hay-producing states has been declining rapidly, according to USDA’s Annual Crop Production Summary. Supply of all hay is at the lowest level recorded since 1957.
Lower stocks means lower production due to lower acreage and the drought, says Dan Undersander, University of Wisconsin - Madison agronomist. "If prices stay high, it will encourage people to stay in hay, but if prices fall, they’ll transition acres to corn."
Last year, hay growers harvested 79.6 million tons of hay, down 11% from 2011’s 89.5 million tons and off 21% from 2010’s 100.2 million tons. Acreage declines occurred across most of the Corn Belt, including Iowa, Minnesota, Illinois, Michigan and Missouri.
All alfalfa production, which includes baled alfalfa, green chop and haylage, also fell in 2012. Area harvested in the top 18 alfalfa-producing states slipped 5% from 13.8 million acres in 2011 to 13.1 million last year. And 2012’s harvested acreage was nearly 10% lower than 2010’s 14.5 million acres. Total alfalfa production fell 19% from 52.7 million tons in 2011 to 42.5 million tons last year. Last year’s production is a 24% decline from 2010’s 56 million tons.
Yield per acre of all alfalfa has also been dropping, from 3.85 tons in 2010 to 3.81 tons in 2011 to 3.24 tons last year. Thus, during the past two years, yield has plunged more than 15%.
"This winter will be a reasonably mild one," says Undersander. A mild winter will help keep a ceiling on demand and limit the drawdown in stocks.
With stocks as low as they’ve been in decades and drought continuing through much of the Midwest and high plains, livestock producers and hay growers will need to produce as much hay and haylage as they possibly can early in the season, Undersander notes.
Make Hay Early. Undersander recommends that grazers put 30 lb. to 40 lb. of nitrogen on each acre of pastureland this spring. That, he says, will yield the equivalent of an extra ton or two of forage per acre that animals can graze.
"Hay prices will likely stay high for the coming year," Undersander adds. He advises dairy producers to return to the historical practice of having six months worth of baled hay in the barn in addition to a full-year’s worth of need. "It’s a good practice and dairies should return to that practice," he says.
- March 2013