Michigan hay markets warming up
Hay prices may continue to move higher if grain markets climb and the drought conditions widen.
Like the last dog days of summer, the Michigan hay market is starting to warm up. With some carryover from the 2010 crop and a good 1st cutting in 2011, hay prices in Michigan this summer were nothing to brag about, let alone make much of a profit. The 1st cutting of the season had good yields, but because of the wet weather, quality hay was hard to make. Quality alfalfa hays were seeing strong demand and profitable prices, but the average to low quality grass hays were struggling to stay at a break-even price.
Still there was the feeling that those lower prices wouldn’t stay down for long. With $13 soybeans and $7 corn, the $25 round bale of hay was looking like a dinosaur. Farms with dairy cattle and livestock were going to feed more forage crops, and cash crop farms were going to plow down more hay fields and plant grains. Hay supplies were going down and prices for all hays were eventually going up. Add in rising beef and dairy prices, along with the worst drought that folks in the southwest U.S. can ever recall, and everyone’s gut feeling quickly is turning to reality.
Hay acreage across the United States was down this spring by 4% according to the U.S.D.A. and by the end of this summer will likely have fallen even more. Milk prices have climbed to a profitable level for many dairy farms, and beef prices are only being held from climbing to historical high levels by the liquidation of substantial numbers of cattle in the Texas and Oklahoma region by the brutal drought.
Even in Michigan many later cutting hay yields were not impressive. Rainfall was either feast or famine across the State. Some of the areas with large rain events lost fields of mowed hay that just could not get dry fast enough. The western Upper Peninsula and the southernmost Michigan counties are labeled as being “abnormally dry” on the U.S. Drought Monitor map. Many other areas of the State are getting dry enough that it is reducing hay yields and bringing cows off of pasture and to the hay bunk sooner.
In mid-August hay brokers supplying hay to Texas began seeking hay in Michigan, and Great Lakes hay is now being shipped to the Longhorn State. All of this is putting pressure on, not only good quality alfalfa hay, but even the lower quality grass and grass mixed hays, especially those that are in large or small square bales that can be shipped long distances more economically.
The market for low quality round baled hays of less than 100 Relative Feed Value (RFV) is ranging from $75 – 90 per ton. The alfalfa/grass mixed round baled hays over 100 RFV are selling in the $85 – 115 range. These hay types when made in a small or large square bale form are selling for $20 – 30 per ton more, mainly because they can be transported more economically getting more tons on a trailer load.
The better quality alfalfa mixed hays, 125 – 140 RFV are selling for $125 -180 per ton with no rain, and the premium quality alfalfa dairy hays over 150 RFV with no or little rain are going for $150 -$230 per ton mainly in small or large square baled form.