Short Feed Supplies Support High Hay Prices

 Short Feed Supplies Support High Hay Prices

I’m KayDee Gilkey with the Northwest Farm and Ranch Report.

Northwest Farm Credit Services recently released their quarterly Market Snapshots on 18 different commodities. Today, we’ll focus on the Pacific Northwest’s hay market.

Michael Stolp, Northwest Farm Credit Services Vice President of Marketing Research and Development shares a brief overview of the hay snapshot.

Stolp: “Northwest hay producers are benefitting from strong hay prices in 2012. However, hay growers are meeting price resistance from dairy buyers and Northwest hay exports face renewed competition from California. Nevertheless, the drought that’s gripping the nation has had a dramatic impact on feed availability and price. This should support Northwest hay prices at least until harvest of the 2013 crop begins. Hay growers that still have available hay stocks will likely take a ‘wait and see’ approach given the likelihood of rising prices going into the spring.”

The snapshot states that dry conditions and range fires have Northwest beef cattle producers tying up hay early in anticipation of feeding more hay this winter. Northwest cattle producers that generally have excess hay to sell are generally holding tight to any available supplies as a hedge against the loss of winter range.

For now, dairy industry weakness will continue pressure hay prices downward. Going forward dairy producers’ profits are dependent on milk prices outpacing rising feed costs. Unless that occurs, dairies will continue to buy hay hand-to-mouth and culling of herds will intensify.
I’m KayDee Gilkey with the Northwest Farm and Ranch Report on the Ag Information Network.

For more information on the Northwest agricultural and forest products industries please visit Northwest FCS’ Knowledge Center.