Hay Production Lower and Price Rises In 2022admin
Total U.S. hay production decreased by 6.8% year over year. Drought in the southern plains pressured grass hay production down by as much as 40%. Alfalfa production in the Southern Plains, a small portion of total hay production, decreased by 22%.
The Great Lakes, Northern Plains, and Northwest regions are the few areas posting more hay production in 2022 than in 2021.
Hay Prices and Production
Hay prices nearly doubled from 2020 to 2022, but why? Is it exports? Exports remain a small portion of hay utilization. In 2021, just 17% of total west coast production was exported.
Costs for hay production have skyrocketed in 2022. Fertilizer is driving the bulk of the overall increase, followed by fuel, and then general cost increases for other categories (what could be considered “general inflation”). While we can debate the exact causes of all these increases (i.e. “Policy Blunder” or “Putin’s War”), we have a serious situation that needs to be understood and dealt with.
Changes in fertilizer prices between 2021 and 2022. Assuming we are using 60 units of N, 30 units of P, and 100 units K per acre, our total fertilizer cost bill would have gone from $67 to $150/acre, or an increase of $73/acre.
But before we get to exports, let’s look at where we started the production season. On the first of May, hay stocks were lower year over year. Low inventory to start the season gave a tailwind to hay prices, allowing prices to rise early in the season.
Grass and Alfalfa hay production are below the 5-year average in many states. The combination of low beginning stocks and lower production fundamentally supports higher prices.
Exports remain a small portion of total hay demand, and if you listen to the Hay Kings Podcast episode: you will find out that grass hay exports are not supportive of hay prices. Many factors drive higher hay prices. Limited supply is among the most significant driver in 2022.
Record alfalfa hay prices
“We’re not at the record lows we saw in 2007, 2013 or 2019, but we’re getting close to that level,” said Mike Rankin, managing editor of Hay & Forage Grower. “There is not as much hay in the barn as we had from 2015 to 2017.”
“The U.S. Department of Agriculture is forecasting alfalfa hay production to be down 1% from last year and grass hay down 11%,” said Rankin during a webinar hosted by Hoard’s Dairyman. “A lot of that is related to the drought situation in the Central and Southern Plains, where they grow a lot of grass hay.”
The September average alfalfa hay price is record high this year, Rankin said.
“And we thought it was high last year,” he said. “There has been over $100 movement upward in the last two years.”
For supreme and premium quality alfalfa hay, the price is at $342 per ton, the speaker reported.
“This year, the lowest hay prices seem to be in the Midwest states,” Rankin said.
“There is no reason to think hay prices won’t stay high since drought has become the norm in many areas of the west,” he said.
“It is true again this past year, so it’s going to take more than one above-average year to bring them out of drought and that’s going to keep hay prices high in the western U.S.”
Another reason for higher hay prices is strong exports, especially to China.
“China is taking over 50% of our total exports,” Rankin said.
With high input costs, making hay is going to cost more.
“Fertilizer prices have leveled off a little bit and in some cases down a little, depending on what sources you’re looking at,” Rankin said. “But we still expect fertilizer prices to remain high going into the next growing season.”
The good news for dairyman, Rankin said, is seed supplies will be improved relative to last year.
Timothy export market prices years ago
In 2018, timothy hay export prices in Washington and Idaho were at record highs on first cutting with strong demand. In 2019, demand started strong on higher quality first-cutting timothy, but it didn’t last long. Demand and prices started to decline in mid- to late June and have not recovered. A few sales of premium dairy timothy big bales in Washington last week were $230 to $235 freight on board (FOB) in wrapped stacks compared to $270 to $280 per ton in mid- to late July of last year.
While demand has turned light on even premium quality horse and dairy timothy, demand for lesser quality timothy for export is very light. The large carryover of old crop timothy from last year and lower prices have created an atmosphere of caution with overseas buyers. Some timothy growers in Washington have recently plowed out timothy fields and will not harvest a second cutting due to the lower market.
Orchard Hay prices of 2022
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Hay and fodder shortages across eastern Australia
Stock feed prices are rising as widespread floods take out key fodder-growing regions in eastern Australia, causing an increase in farming costs that will be passed on to consumers.
According to Dairy Australia, wet weather has hindered usual hay, silage and grain production, with harvesting and processing delayed as fields dry out – if the crop hasn’t been destroyed entirely.
Dairy Australia commissions the Hay report through the Australian Fodder Industry Association.
It found that what hay is available may be of reduced quality.
“There are expectations of supply shortfalls of both cereal and protein hays and supply pressures on all other fodder types,” Dairy Australia industry analyst Isabel Dando told Guardian Australia.
“High-protein hay options such as vetch hay are expected to be in significantly short supply, after wide reports of vetch crop failures.”
Dando says some hay crops have instead been turned into silage, which requires less curing time before baling, which means farmers can bale it in the brief gaps in the weather.
“There are reports across Bega Valley, Goulburn-Murray Valley, and Gippsland that where possible, around the wet weather, silage cutting has been taking place,” Dando said.
Horse owners, farmers and equine charities have shared their concern for the coming winter, with conditions meaning a second cut of hay is unlikely for many parts of the UK, while horses are already making a dent into forage supplies to supplement poor grazing.
Kent-based Jennie Yandle was among the many no longer able to rely on grazing and hard feed alone this summer.
“I’ve definitely been giving hay earlier,” she told Your Horse. “Normally between May to September I can rely on my grazing to give my horses enough energy alongside a hard feed, but since around the middle of June the four I have, have had hay every day and I don’t have any grazing currently, everything is brown and effectively dead.”
She said her hay provider currently hadn’t put their prices up but they were expecting to in September or October.
Securing forage for winter
Event rider and Norfolk-based hay producer Ellie Savory painted a similar picture and said due to rising costs of production and a dry hot spell, her hay yield to date was slightly down on a ‘normal’ year.
The increasing costs of fertilisers and fuel meant she only gave the crop a single dose of fertiliser this year, rather than the normal two, but this hay was cut early, without any rain to cause damage.
However, the continued lack of rain means there won’t be a second cut in September, so what’s in store is all there will be for her local customers this year.
“We supply a couple of wholesale customers who have already purchased 50 percent more hay in August than they usually would,” she told Your Horse. “Equally, as an owner of four horses, I’m noticing that I’m using far more hay than I usually would for the time of year.”
Ellie said owners should prioritise securing enough forage to see them through the winter.
“With no second cuts on the horizon, certainly in the south east where we’ve had very little rain since December, and many farmers cultivating straw back into farmland to save on the costs of P&K and fertilisers, there’s going to be a short supply of both hay and straw this winter and little more will be cut or produced before next summer.”
Jenny Surtess also produces hay alongside running Oxford Retirement Livery on a 268-acre farm. She said the 40 horses in her care did have grass in their fields, but it was like “hay on a stalk” and was not growing.
“It’s really noticeable how dry it has been, plus we had quite a dry winter and spring,” she said. “We have water meadows and two rivers, neither have flooded which has never happened before.
“All the producers we know locally won’t be getting a second cut.”
She said her horses have been given big bales of hay in their fields since the end of June and even if we had a lot of rain now, it wouldn’t make up for three months of no grass growing.
She added that due to the rising prices for those producing the hay, prices will have to go up.
“Farmers are quite good at evening out their costs and they don’t want to frighten customers away, but we will have to see some increase, particularly if people are having their hay delivered,” she said.
However, she said owners could save money on their hard feed bill by prioritising good quality hay for their horse.
“[Owners don’t always realise] how important good quality forage is,” she said. “If you give your horse enough really good forage your hard feed bill [will shrink]. You won’t have the same reliance on hard feed as you think you need to, and it’s better for the horse.”
Essex-based farmer Mark Woricker produces hay, straw and haylage and said it was important to recognise the bigger picture.
He said farmers have incurred price increases on production, including steep increases in the cost fuel and fertiliser, as well being affected by the weather.
“Fertiliser prices have quadrupled so people don’t put it in because they cant afford to,” he told Your Horse. “This reduces yield and then the weather, dry with no rain, has reduced crop further.”
He said his hay has been a lot finer this year and kept its colour better, but East Anglia as a whole has seen large crop reductions and so have his colleagues in Kent.
“There will be no second cut of hay,” he said. “People are going to have to pay more because we’ve incurred huge price increases.”
He added that this year’s straw crop was a clean, low-dust crop, which is “exceptionally dry”, so could offer horse owners a cheaper bedding alternative to shavings.
Cost of living crisis on Hay
What does the forecast look like for equine welfare this winter with reduced grazing and reduced hay supplies?
Viki Cooper, Supervisor at World Horse Welfare’s Hall Farm Rescue and Rehoming Centre in Norfolk said it was likely to be a difficult time for many owners.
“We are concerned that we will see more horses coming in as welfare cases as we go into winter and through into spring next year as cost of living rises and availability of hay starts to bite,” she told Your Horse.
“At the moment we haven’t needed to make great changes as we’re still using last year’s hay. We’ve only been able to make one cut from our hay fields though, and we took the smallest crop in years. There’s been little regrowth and these fields – normally reserved for winter grazing – are having to be grazed now, so this winter will certainly see a difference for us and we’ll definitely have to buy in much more hay.”
Redwings has also seen a dip in their forage yield, as the charity grows some of its own hay, and reported similar production cost concerns as the farmers.
“Anything to do with land and forage is different year to year, and this year has been extremely challenging,” chief executive Lynn Cutress told Your Horse.
“Yield from some of our locations is as much as 50 percent down. The price of fertiliser and availability has been a significant problem this year, along with the cost of fuel.”
She said the charity has had to feed hay throughout the summer and in some cases the rate of forage use has almost matched what they would expect to use in mid-winter.
“This of course also impacts on staff time, plus fields that have been rested for winter haven’t grown as much as we would expect,” she said.
“With so many horses to look after on a daily basis, we plan our supplies carefully. We have good relations with several suppliers who help us with sourcing forage, as this is the responsible approach for a charity of our size, and good practice with evaluating what food and forage our horses need under guidance of vets and nutritionists.
“But whilst we have secured what we need for the coming season, as a charity the costs are very concerning and of course this is something we’re keeping a close eye on.
“It’s been a very difficult time for recruitment in the equine sector and our staff have been called upon to adapt to the frequently changing challenges of caring for our horses this year, particularly in the hot weather, for which we’re extremely grateful.
“It’s impossible to predict at this stage exactly what the welfare landscape will look like over the coming months but certainly these are tough times for all horse owners so is something we are monitoring closely.”
While your grazing may not be as good as usual this time of year, it may still be providing enough calories for your horse.
Gemma Stanford, Director of Welfare at The British Horse Society (BHS), recommended a low-calorie balancer or vitamin and mineral supplement to ensure your horse is getting what they need.
“It’s about assessing the level of work the horse is in before providing additional forage, and fat scoring the horse to help evaluate whether they need any additional calories,” she told Your Horse. “It’s important to note that horses aren’t burning as many calories through the summer as they naturally would through the colder winter months to keep warm.”
Driving Prices Up
- Recent high impact rainfall events and flooding has further reduced expected Spring hay production. Rainfall has impacted broadly across most states with widespread reports of crop losses or crops which will no longer be suitable for high quality hay production.
- Many vetch crops, which had to be cut for hay prior to going in to pod, have been impacted by rain and weather unsuitable for baling. Most are now only suitable for in paddock mulch.
- Growers had already reduced hay crop plantings due to the continual rise in input costs. A growing number of producers have indicated they will hard pressed to harvest and process hay for existing customers with long-term, reasonable price, contracts.
- The loss of vetch hay crops, reduction in expected quality and quantity of other high protein hay options will lead to high protein hay shortages.
- Fuel costs will be factored into hay and sileage deliveries. Labour shortages and road damage will also impact timeliness of deliveries.
Driving Prices Down
- Good spring pasture growth potential is predicted to reduce the need for hay, providing paddocks are accessible.
- Expectations that the forecast wet Spring will support continuation of in pasture and in paddock feed options.
- The Bureau of Meteorology (The Bureau) predict a continuation of the La Niña event currently leading to high number of substantial rainfall events across New South Wales, Tasmania and Victoria. Up to 100mm of rain fell across central northern Victoria and up to 200mm in parts of Tasmania.
- With moisture profiles already at saturation point, continued rainfall events have led to many flooding events across eastern Australia. With further expected flooding over the coming days the damage to paddocks, crops and property will not be accurately measurable for some time.
- The wet weather has already reduced the quality of some product for the new season as it is impacting and in many cases halting the cutting and processing of early season hay and silage.
- Wet weather is leading to a high demand for fertiliser and crop protectants as growers look to maintain the health and quality of their remaining hay and grain crops.
- The return of the fuel excise led to increased costs for diesel deliveries to farms adding to the already high production and delivery costs for fodder. Deliveries are also being impacted by flooding and road damage from rainfall and flooding events.
- As the widespread damage to crops has become evident prices are beginning to rise across most areas. Exporters and the domestic market appear to still be waiting for stronger supply signals. There is an expectation that prices will significantly rise once the short supply is clear.
- Purchasers of hay with long term relationships and a willingness to recognise the need to pay a price that allows hay producers a reasonable rate of return are likely to be given first preference over any new season’s hay able to be produced.
- Buyers are encouraged to feed test and view fodder before purchase to be sure of the quality of feed.