AP: Central Oregon hay prices may rise to $250 per ton

Central Oregon hay prices may rise to $250 per ton

Hay growers see little increase in profit due to rising fuel costs

BEND (AP) — Hay prices are expected to increase to as much as $250 per ton this summer, officials say.

It will be a big jump from last year, when prices ranged from $150 per ton to $175 per ton, said Tony Aceti, owner of Aceti's Hay Depot on U.S. 97 north of Bend.

Farmers who grow hay, meanwhile, are experiencing higher fuel costs that are eating away at their profits, Aceti said.

“Even the twine to bale the hay costs more because it’s made from a petroleumbased product,” he said.

Central Oregon sales for alfalfa and grass hay grew 36 percent last year from $23.9 million in 2005 to $32.4 million in 2006, according to the Oregon Agricultural Information Network, which provides state and county agricultural data.

Fuel cost problems

Local farmers, who are getting ready to cut their alfalfa and grass hay crops, say rising costs are making it more difficult to make a profit despite the rising demand for hay.

"Fuel is driving everything," said Ken Caudell, owner of Caudell Farms in Terrebonne. "It's a major reason why the supplies are down."

The state's hay supply reached its lowest point this month since 2000, according to the National Agricultural Statistics Service. The nation's hay supply, meanwhile, fell to its lowest point since 1950, the agency also reported.

Switching to corn

Many farmers in Oregon and across the nation who grew hay are switching to corn production to meet the nation's growing demand for corn-based ethanol, said Jack Getz, the officer in charge of U.S. Department of Agriculture’s Livestock and Grain Market News, based in Moses Lake, Wash.

The demand for hay in the Western states, however, continues to rise as hay stocks fall, Getz said. More cattle are consuming hay, especially in the dairy industry, he said.

Dry weather also has contributed to a loss of pasture land in states, including California, Getz said.

Nitrogen costs, which are an essential fertilizer for most of the grass hay grown in the region, rose from $254 per ton in 2004 to $344 per ton in 2006, according to the federal and state data from the National Agricultural Statistics Service.

For the most part, hay growers are going to have a successful year, said Mylen Bohle, an agronomist for Oregon State University's Crook County Extension Service.

"We've been short on hay the last couple years," he said. "But it might not be quite as bad for hay growers. They can do quite well with the price of hay the way it is."