Michigan’s hay supply is back
Michigan’s hay supply is rebounding after some tough years
Hay production in the State of Michigan was off by 43 percent in the year 2012 according to the USDA’s Crop Production Summary, mainly because of the drought that occurred in that year. In 2013, the rising price of corn, soybeans, and other grains led many producers to plow under hay acres and plant grain crops reducing hay acres in Michigan by almost 5 percent over a two year period.
In spite of the drop in acreage, the Michigan hay supply has recovered and is poised to enter into surplus territory in 2015 according to Michigan State University Extension field educators. The total production of all Michigan hay in 2014 was 2.1 percent higher compared to 2013, which was 36 percent higher than the 2012 drought year. Much of this 2014 increase was because of additional acres coming back into hay production as 95,000 acres were seeded to hay in 2013 and 90,000 in 2014.
The production of hay is only part of the story for this surplus forecast in 2015. The demand for hay appears to also have been weaker in 2014 and may soften even more in 2015. Beef cattle numbers are at fifty year lows and are projected to start increasing gradually over the next few years. The lowering of grain prices also provides an economical alternative feed source that can replace some hay in the diet for many hay consuming animals. This spring also revealed a noticeable supply of hay being carried over on Michigan farms, adding to 2015’s supply. All of these factors are expected to soften demand in 2015.
At the mid-point of the first cutting hay harvest, it appears that an abundant supply of hay is being harvested. Substantial spring rains have fallen in most regions of the State and first cutting yields, which are the largest harvest of the summer season, are good to very good. Soil moisture will help to push the second cutting crop which could make it an above average harvest as well. The only determent to the spring hay growth for some farms has been late spring frosts that injured some alfalfa and grass growth in the Central and Northern Lower Peninsula. But this injury in the end will have minor impact on the overall hay supply.
The market price for low quality round baled hays remains soft; in some locations below the cost of production, with relative feed value (RFV) hays of less than 100 ranging from $70 – 90 per ton. Some prices of these hays are even lower as sellers are cleaning out their left over 2014 hay and dumping them at weekly livestock auctions. The alfalfa/grass mixed round baled hays over 100 RFV are selling in the $80 – 110 range. These hay types when made in a small square bale form are selling for $130 - $180 per ton, mainly because they can be transported more economically, and because so few farms make small square bales.
The better quality alfalfa mixed hays, 125 – 140 RFV, are selling for $125 - $165 per ton with no rain, and the premium quality alfalfa dairy hays over 150 RFV with no or little rain are going for $160 -$200 per ton mainly in small or large square baled form. In Michigan and the Mid-West, it is hard to find premium quality alfalfa hays selling for over $200 per ton. The primary buyer of these hays is the dairy industry and with milk prices being depressed, dairy farms are adjusting their rations budgets accordingly.