2-5 IAT Hay and Sugar Beets

Michael Stolp is Vice President – Market Research and Development for Northwest Farm Credit Services and I get together once a quarter to hear what's happening in ag as in hay and sugar beets:

Hay -- Tepid demand has dampened Northwest hay prices. Dairies are taking advantage of lower corn prices and appear to have sufficient hay stocks for the short-term. Exporters are largely out of the market at this point due to sufficient stocks to meet weaker export demand for Northwest hay. Although hay prices have softened, prices remain at or above breakeven levels. Looking ahead, shortages of high quality alfalfa persist going into 2014 given less than ideal growing conditions across the Northwest the past three seasons. Limited supplies will likely continue to support prices at profitable levels for higher quality alfalfa.

Sugar Beets -- Northwest sugar beet growers experienced above average yields, but reduced sugar levels due to weather challenges this season. International sugar markets are bearish, pressured by high sugar supplies and reduced world consumption. With lower prices and discounts due to lower sugar content, Northwest sugar beet growers' profit margins continue to decline. Current sugar beet prices are near breakeven levels for most growers.