OMAHA (DTN) -- With drought continuing in the region where the Western Corn Belt meets the High Plains for a second straight year, there are some major questions about the level of forage production. Concerns about hay supply will certainly not decrease already high prices.
Forage production levels will largely depend on how much moisture an area got; rain has been extremely spotty during the first half of the growing season.
Low hay stocks in some states mean forage buyers will likely see continued elevated prices. Some livestock producers are moving to secure hay earlier this year, as there is some concern about supply.
BUYERS LOOK FOR HAY
Weather concerns have many people thinking the forage supply will again be short this year, according to Paul McGill, owner/manager of the Rock Valley Hay Auction located in Rock Valley, Iowa. While some pockets have seen rain in July, other areas continue to be terribly dry.
The dry areas were farther west last year while the eastern areas of McGill's sales area (Iowa, Nebraska, South Dakota, Minnesota) had more moisture. This year it's the opposite. There are more western areas with more moisture and eastern areas dry, he said.
Hay buyers continue to look for hay during a time of year in which there is usually less demand on the market. By the time spring calves are being weaned and being sold to feedlots (usually in September and October), this is when their hay sales numbers increase, McGill said.
To read about the effects of hay prices and supply on the cowherd, see "Call the Market" by DTN Livestock Analyst ShayLe Stewart here: https://www.dtnpf.com/…
Rock Valley's sale on July 13 featured 140 loads, which is more loads than usual for this time of year. Several loads came from central to northern Minnesota, which has seen good moisture this growing season.
Areas of eastern South Dakota have been drier and fewer loads are available out of that region this year. He estimated grass hay in that region could be 60% to 70% less because of the drought.
"The guys who come down from central Minnesota are just amazed at how high our hay prices are compared to up there," McGill said.
Many hay buyers are purchasing more aggressively this summer, which is why sellers are bringing more loads to the market now. This may be because some hay buyers are somewhat nervous about supply and price come later this summer and into the fall, he said.
PRICES STAY STRONG
McGill said hay prices in recent sales have been a bit weaker, as he estimated about $20 to $30/ton less. This most likely will be a short-term feature, and he figures prices will rebound to higher levels in the next month or so, he said.
Rock Valley's alfalfa prices on its sale from July 13 (https://www.rockvalleyhay.com/…) ranged from $160 to $265/ton while grass hay ranged from $135 to $232.50/ton. Mixed (alfalfa and grass) hay brought $155 to $185/ton, corn stalks went for $90 to $92.50/ton and straw brought $80 to 130/ton.
The USDA Nebraska Direct Hay Report (https://www.ams.usda.gov/…) showed 9,670 tons sold for the week as of July 14, compared to only 2,970 from last year at the same week. Compared to last week, all forage sold steady.
"Demand was good in the eastern part of the state with light demand in the central and western parts of the state," the report stated.
McGill said long-term hay prices most likely will continue to increase. Looking into the fall, hay prices will probably increase as seasonal demand returns to the hay market.
"It's really hard to know what prices will be, come fall and early winter, but I think we are going to see higher prices through that Thanksgiving-to-Christmas time frame," he said. "Inventories could be considerably lower by then."
FORAGE PRODUCTION SPOTTY
With different moisture levels across the region, forage production levels may not be known until the growing season is over.
Ben Beckman, a University of Nebraska-Lincoln (UNL) Extension livestock systems educator located in Hartington, Nebraska, told DTN he doesn't have a real good feel of forage production in the state. Located in Cedar County in northeastern Nebraska, rains have been good in July.
However, the entire region of northeastern Nebraska continues to be in a drought. While Exceptional Drought (D4) has shrunk considerably, most of the state is covered in some sort of drought, according to the U.S. Drought Monitor Map (https://droughtmonitor.unl.edu/…).
Both cool-season grass (mainly brome grass) and alfalfa production in the region saw below-average levels so far this growing season because of extremely dry field conditions. While second-cut alfalfa was better due to the recent rains, this doesn't change the fact much of Nebraska is seeing major production concerns.
"We saw a decrease in standing hay supplies this year, so demand is going to be high the way it is," Beckman said. "These continuing supply issues are not going to help the hay market."
LOWER HAY STOCKS
USDA reported May 2023 hay stocks for the U.S. to be 13.4% less than the previous season (https://www.nass.usda.gov/…). Northern Plains states saw a rebound in hay stocks, with South Dakota up nearly 15%, North Dakota 64% higher and Minnesota 73% higher.
Other states, however, saw some steep declines in the amount of hay on hand. Nebraska's May 2023 hay stocks were down 58% compared to the previous year, while Iowa's is 47% lower.
Kansas was one state with a slight increase in hay stocks, with 10% more hay in May 2023 compared to the prior year. Some areas are seeing more moisture, while others are not across Kansas.
Kaitlyn Hildebrand, Kansas State University Extension livestock production district agent covering the River Valley District in north-central Kansas, said different moisture levels in her four counties (Clay, Cloud, Republic and Washington counties) have different growing conditions for each county. This situation makes knowing how much forage is available extremely challenging even in her area, she said.
Hildebrand noted many producers who put up brome grass hay in the region delayed harvesting to hopefully catch some recent rains to increase tonnage. While some additional growth might be seen, about 75% of the growth in brome grass comes before July 15, she said.
"Any little bit of increased production helps, I suppose," Hildebrand said.
Livestock producers in the region are concerned about the price and supply of hay, and many are turning to alternative forage sources, she added.
Some producers turned to planting annual forages such as sorghum Sudan grass, while others might put up more corn stalk bales after the corn harvest in the fall. There was higher-than-usual demand to purchase wheat straw after the harvest last month, she said.
PLAN NOW FOR HAY NEEDS
Considering the forage production supply issues, Beckman said he would recommend those who need to purchase hay start to plan now. Consider what your hay needs will be, and it might be easier to buy earlier, he advised.
Also, think about selling calves and culling cows sooner to limit the amount of forage that will be needed and to take advantage of the current higher cattle prices.
"The more flexibility you have in your operation, the better you will be to handle increased forage prices," Beckman said.
Hildebrand suggests producers test their forages to know exactly what nutrients level are present in the hay.
With drought conditions affecting all crops, she also recommends producers test their forages for nitrate levels. High levels of nitrate in drought-damaged crops can affect livestock -- extremely high levels can kill animals.
Both Kansas State University Extension and private laboratories offer forage and nitrate testing, Hildebrand said.
Russ Quinn can be reached at Russ.Quinn@dtn.com
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