Michigan hay supply growing in quantity not quality
The wet Michigan spring weather increased hay yields but decreased hay quality across most of Michigan.
Abundant spring rains in Michigan increased the first cutting supply of Michigan hay in many locations in spite of factors that many thought would lower the supply this year.
In Michigan and across the country, the strong demand for corn, soybeans and wheat acreages lead to increased conversions of hay fields to these attractively priced grain crops. Hay acres are down an estimated 4% nationally in 2011 compared to 2010 according to the USDA.
With some supply carry-over from the 2010 hay crop in Michigan and with abundant rain during the first cutting harvest season, there is still plenty of low quality, sometimes rained on, over mature hay available in the Great Lakes Region. There is still the chance that the rest of the summer could turn dry and lower the remaining harvests, but since the first cuttings usually amount to over 65% of the total summer’s harvest, it is unlikely it will change too much at this point.
The story for the higher quality dairy hay is different, as this supply is much lower. Many dairy farms were able to harvest haylage in June, but the amount of high quality, dry baled hay for sale is in short supply thus far. There is the hope that the abundant soil moisture will provide a good second cutting and possibly a third cutting that could put some quality baled hay on the market. However, some areas of Michigan are already starting to turn dry which will lower these later cutting yields.
The supply difference between low quality grass hay and high quality alfalfa-based hay will lead to wide price spreads between these two groups again this year. The price of fuel, machinery and fertilizer are running high, resulting in greater hay-making costs which have edged up 5-8% over 2010. It is currently estimated that the cost of making dry baled hay in 2011 is ranging from $90-$110/ton.
The market price for low quality round baled hay remains soft; in some locations below the cost of production, with relative feed value (RFV) hays of less than 100 ranging from $65–90 per ton. Alfalfa/grass mixed round baled hay over 100 RFV are selling in the $80–105 range. These hay types, when made in a small or large square bale form, sell for $10–30 per ton more, mainly because they can be transported more economically, getting more tons on a trailer load, and because so few farms make small square bales anymore.
The better quality alfalfa mixed hay between 125–140 RFV is selling for $105 -135 per ton with no rain, and the premium quality alfalfa dairy hay over 150 RFV with no or little rain is going for $140-200 per ton mainly in small or large square baled form.