Northwest hay market reminiscent of 2008
Farm and Ranch October 18, 2011 Striking similarities to the high-price, tight supply hay situation of 2008 exist today. That’s what Northwest Farm Credit Services Knowledge Center’s most recent quarterly Market Snapshot states. Knowledge Center Coordinator Matthew Kloes says today’s level of supply and demand should create a solid floor that supports strong hay prices for the remainder of the year but he says it is also important to recognize there are a number of risks to this outlook based on the lessons learned in 2008. Kloes: “Tight supplies were not enough to sustain strong hay prices in the wake of global economic weakness three years ago, declining milk prices three years ago. And really we are seeing a similar situation today where the economic outlook is fragile and we are in an environment of declining milk prices.” Kloes says one difference from 2008 is what hay producers have done to protect themselves. Kloes: “Hay producers have done a great job getting a down payment from their customers, up to 90% in some areas.” Kloes says the drought in Texas has affected the northwest hay market. Kloes: “In fact we have heard for demand for hay in Idaho that is headed down to Texas. So, we are really looking at what is almost described as a west coast-south market for hay. People are looking for hay anywhere they can find it and that‘s really throwing off the usual dynamics of the hay market in the northwest.” I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net. ? ?
