11-4 FB Grow Hay or No

 Here’s a conversation I had with Michael Stolp ?VP of  Market Research and Development for North West Farm credit services. You know I have heard that we are sending hay to Texas, North Dakota and other places because of the drought situation. If that is true wouldn’t that increase the value of hay for our own hay farmers? Absolutely. There is a significant shortage of hay on both the West Coast and the southern plains due to drought. And that is likely to contribute to strong demand from out of state buyers of Northwest hay. At the end of the day where folks cannot afford to buy hay in the Northwest it will find a buyer outside of the Northwest. Should a farmer contemplate growing hay next year, wouldn’t that be a wise decision? As you think about the rotations, those have really been driven by competing crop prices and it is really uncertain at this point what those competing crop prices are going to do. But  most likely they will be up. At this point most hay producers will be weary of a weakening dairy environment and will continue to offset risk by not producing hay as much as possible. If you think about the supply situation and the shortage that is going to be with us into next year and possibly into 2013, it seems like hay should garner good prices so really it will be up to the risk management expectations of the grower to make that determination.