First came high corn prices, followed by an Easter 2007 freeze, followed by an extreme drought. Combined, these factors have left Kentucky livestock producers in dire straits in terms of finding affordable feed for their animals.
“Certainly, when all is said and done we will see the lowest carryover we've seen in many, many years,” said Tom Keene, hay marketing specialist with the University of Kentucky College of Agriculture. “It's going to put a lot of pressure on the 2008 crop.”
Continued high prices for soybeans and corn may influence some growers to plant these crops, rather than traditional hay crops. For livestock owners who have depended on these farmers for hay over a period of time, this will be a big problem, Keene says.
What the Kentucky specialist expects to see in Kentucky is farmers working furiously to bale as much hay as possible to meet their needs as either livestock producers or hay sellers.
For livestock producers, he said, they need to figure out how many cattle they will be feeding and how much hay they will need to feed their herd from November until April 2009 and shoot for that target.
It is recommended that farmers keep some extra hay as a cushion, in case they need more than anticipated or they face another year of short supplies. Once they meet that, then they can market the remainder.
“It's going to be interesting,” Keene said. “Producers learned some tough lessons this past year. Many will be better cattle managers and forage managers in 2008 than they were in 2007.”
Hay prices will likely remain higher than they were prior to 2007. Strong demand for other commodities limits the likelihood of additional acres being seeded in forages. Couple that with higher costs for fertilizer and fuel along with seed shortages, and farmers will need to get more for their product to be profitable.
Keene cautions farmers about cutting hay on new ground or from fields that have a history of weed problems. These fields may produce low quality hay. He encourages farmers who may go this route to have their hay tested for quality, though all producers should do this. Knowing the quality of the hay allows a producer to know what nutrient levels will be available for his livestock or allows the hay seller to price his supply accordingly.
How much growers should charge for their hay is another question. Hay prices in some areas of the Southeast have doubled since the spring of 2007. For example in North Carolina certified weed free alfalfa hay is selling for up to $160 per ton. Square 3X3 foot bales of bermudagrass hay sell for $125-$140 per ton.
Across the upper Southeast, the story is much the same — high prices and low supplies. In Virginia, alfalfa hay is slightly more expensive than in North Carolina, selling for up to $200 per ton.
Establishing a fair price for hay is difficult, because there is no national price structure for hay. Experience, knowing demand and knowing what other hay producers are asking for their hay are the usual criteria for pricing.
Storing, handling and marketing costs should also be factored into the price asked for hay.
While livestock producers everywhere have been hit hard by the combination of high grain prices and low supplies of hay, horse owners in the upper Southeast have been particularly hard-pressed.
The inputs for growing hay have skyrocketed just as they have for row crops, making price both more expensive to produce and more difficult to price. Keene says pricing hay at a fair market price will pay off in the long-run for hay producers.
All livestock producers in the Southeast have been hard hit by the combination of high prices, low quality and scarcity of hay. Combined with the doubling and tripling of corn-based rations, many horse owners in Kentucky and other Southeastern states have been forced to take drastic measures.
Kentucky hay supplier David Brumfield says, “This is probably as bad as I've seen in my 30-something years in the hay and straw business. “We're getting calls every day from people looking for hay from all over the eastern part of the United States. Last year, $50 would buy enough hay to feed a horse for three weeks. Today, that same $50 would get you less than half as much,” Brumfield says.
At best, consumers will see the current hay and feed problems show up in higher meat and dairy products in the grocery store.