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Hay caught up in market whirlwind
Input costs, shortages blamed for expected price increases
Craig Reed
Freelance Writer
June 15, 2007
 |
| Jack Layton of Madras, Ore., turns grass hay to dry it after a rainfall in the first week of June. Haying almost stopped during the unusual and untimely rain in Central Oregon. The hay supply this year has been affected by dry weather in California, which has decreased pasture forage and increased the demand for hay by both beef and dairy producers to feed their animals. Dry conditions in parts of Eastern Oregon and Eastern Washington — notwithstanding the recent rainstorm — have also decreased hay production. - Bing Bingham/For the Capital Press |
ROSEBURG, Ore. - If you have livestock
whose favorite food is hay, expect their grocery bill to remain high.
Hay prices started to climb last winter when there was a shortage of hay because of poor harvesting conditions earlier in 2006, and now they're going to stay up because of increasing costs to grow it.
"It's unfortunate, but just a fact," Mike Hall of Roseburg said of increasing hay prices. Hall buys hay in Central Oregon, trucks it over the Cascades and sells it to feed stores and livestock owners in Douglas County.
"There is concern," said Tim Bare, manager of K-Bar Ranches of Myrtle Creek, Ore. "But right now our customers are happy we have hay again. We ran out last winter and had to truck hay in."
The National Agricultural Statistics Service reported that Oregon's hay supply reached its lowest point in the last month since 2000. That agency also reported that the nation's hay supply was at its lowest point since 1950. The good news is that there's hay again in Western Oregon because weather conditions in May were conducive to cutting, baling and getting it under cover. A year ago, a lot of cut grass was rained on or it was cut later when overripe after the May rains had stopped. In both cases, the hay was either ruined or of poor quality.
The Douglas County grass hay that was selling last year went for $70 to $80 a ton, with the better-quality hay earning $100 a ton. People who drove their pickups and trailers right onto a field and hauled away bales paid $2 to $3 for bales averaging about 70 pounds each.
This year, Don Santos, a Glide, Ore., rancher, said he expects good Douglas County grass hay to sell for up to $120 a ton. Dale Bowman, a hay grower in the Winston, Ore., area, said 65-pound grass bales are already selling for $3.50 to $5 a bale in the field, depending on the quality of the hay.
Grass hay purchased at a feed store could be a dollar more.
"Everybody's barn is empty after supplies were short last winter and people are just buying to build up their supplies again," said Bowman.
Bare said that the May cutting of an orchard grass-alfalfa mix on K-Bar fields was of premium quality and will sell for $165 a ton. "There's probably going to be a 30 percent increase in the price of local hay," said Mike Jackson, owner of Central Feed in Sutherlin, Ore. "The market has changed since last hay season and has been quite high for the last six months. Customers are pretty well used to it now."
Most Central and Eastern Oregon hay producers are working on their first cuttings now. Prices ranged from $150 to $175 per ton a year ago for orchard grass or alfalfa and growers have said the price could increase to $200 or more a ton later this year. Those bales, depending on hay type and weight, could range from $12 to $15 each at a Western Oregon feed store.
Besides short supply and high demand, there are several other reasons for hay prices remaining up. Farm fuel costs went up last year and have remained up. Fertilizer prices have been hiked a couple times in the last couple years and the price for electricity to run irrigation pumps has increased. A smaller expense factor is the price of twine, another petroleum-based product. It also has increased.
"Input costs continue to rise," Bare said.
Data from the NASS indicates that the price of nitrogen fertilizer, used for most of the grass hay grown in Oregon, rose almost $100 a ton in two years to $344 per ton in 2006. Bowman said fertilizing his fields this year cost $36 an acre, compared to $20 an acre last year. Power rates are going up almost 15 percent, and pumps are necessary to irrigate hay fields beyond the spring rains in order to produce hay through the summer.
"Farmers aren't going to make any more on their hay than they did three or four years ago because of the increase in the expense of producing it," Bowman said. "We're not trying to gouge anybody."
Another factor affecting the hay supply this year is that dry weather in California has decreased pasture forage and increased the demand for hay, by both beef and dairy producers to feed their animals. Dry conditions in parts of Eastern Oregon and Eastern Washington have also decreased hay production.
Some producers in traditional Northwest hay areas have also either totally switched from hay to corn production or have planted corn after their first cutting of hay.
There's a growing demand for corn-based ethanol and with an ethanol plant is being built in Eastern Washington, there's a market.
There has already been some talk about livestock owners decreasing the number of animals they have to feed. Bowman said he knew of one Winston-area person who had 23 horses last winter but now has only eight because of the expense of buying hay to feed them.
"I know a lot of them sold cheap at sale," Bowman said.
"I think there's a surplus of horses right now," Jackson said. "They're expensive to feed and most horse people don't make a living from them."
Hall said, however, that people have a stronger bond with their horses than people have with other livestock, so giving up horses will be a difficult decision.
"Most people do seem to be expecting higher hay prices and they're finding ways to cinch up their belts," said Scott Pierson of Silver Lake, Ore., the Oregon Hay and Forage Association president. "They need to pin down their hay now and not have to worry about finding it later.
"Hay is going to be an exciting commodity this year, and those buying it are going to be paying more attention to it," Pierson said.
Hay prices started to climb last winter when there was a shortage of hay because of poor harvesting conditions earlier in 2006, and now they're going to stay up because of increasing costs to grow it.
"It's unfortunate, but just a fact," Mike Hall of Roseburg said of increasing hay prices. Hall buys hay in Central Oregon, trucks it over the Cascades and sells it to feed stores and livestock owners in Douglas County.
"There is concern," said Tim Bare, manager of K-Bar Ranches of Myrtle Creek, Ore. "But right now our customers are happy we have hay again. We ran out last winter and had to truck hay in."
The National Agricultural Statistics Service reported that Oregon's hay supply reached its lowest point in the last month since 2000. That agency also reported that the nation's hay supply was at its lowest point since 1950. The good news is that there's hay again in Western Oregon because weather conditions in May were conducive to cutting, baling and getting it under cover. A year ago, a lot of cut grass was rained on or it was cut later when overripe after the May rains had stopped. In both cases, the hay was either ruined or of poor quality.
The Douglas County grass hay that was selling last year went for $70 to $80 a ton, with the better-quality hay earning $100 a ton. People who drove their pickups and trailers right onto a field and hauled away bales paid $2 to $3 for bales averaging about 70 pounds each.
This year, Don Santos, a Glide, Ore., rancher, said he expects good Douglas County grass hay to sell for up to $120 a ton. Dale Bowman, a hay grower in the Winston, Ore., area, said 65-pound grass bales are already selling for $3.50 to $5 a bale in the field, depending on the quality of the hay.
Grass hay purchased at a feed store could be a dollar more.
"Everybody's barn is empty after supplies were short last winter and people are just buying to build up their supplies again," said Bowman.
Bare said that the May cutting of an orchard grass-alfalfa mix on K-Bar fields was of premium quality and will sell for $165 a ton. "There's probably going to be a 30 percent increase in the price of local hay," said Mike Jackson, owner of Central Feed in Sutherlin, Ore. "The market has changed since last hay season and has been quite high for the last six months. Customers are pretty well used to it now."
Most Central and Eastern Oregon hay producers are working on their first cuttings now. Prices ranged from $150 to $175 per ton a year ago for orchard grass or alfalfa and growers have said the price could increase to $200 or more a ton later this year. Those bales, depending on hay type and weight, could range from $12 to $15 each at a Western Oregon feed store.
Besides short supply and high demand, there are several other reasons for hay prices remaining up. Farm fuel costs went up last year and have remained up. Fertilizer prices have been hiked a couple times in the last couple years and the price for electricity to run irrigation pumps has increased. A smaller expense factor is the price of twine, another petroleum-based product. It also has increased.
"Input costs continue to rise," Bare said.
Data from the NASS indicates that the price of nitrogen fertilizer, used for most of the grass hay grown in Oregon, rose almost $100 a ton in two years to $344 per ton in 2006. Bowman said fertilizing his fields this year cost $36 an acre, compared to $20 an acre last year. Power rates are going up almost 15 percent, and pumps are necessary to irrigate hay fields beyond the spring rains in order to produce hay through the summer.
"Farmers aren't going to make any more on their hay than they did three or four years ago because of the increase in the expense of producing it," Bowman said. "We're not trying to gouge anybody."
Another factor affecting the hay supply this year is that dry weather in California has decreased pasture forage and increased the demand for hay, by both beef and dairy producers to feed their animals. Dry conditions in parts of Eastern Oregon and Eastern Washington have also decreased hay production.
Some producers in traditional Northwest hay areas have also either totally switched from hay to corn production or have planted corn after their first cutting of hay.
There's a growing demand for corn-based ethanol and with an ethanol plant is being built in Eastern Washington, there's a market.
There has already been some talk about livestock owners decreasing the number of animals they have to feed. Bowman said he knew of one Winston-area person who had 23 horses last winter but now has only eight because of the expense of buying hay to feed them.
"I know a lot of them sold cheap at sale," Bowman said.
"I think there's a surplus of horses right now," Jackson said. "They're expensive to feed and most horse people don't make a living from them."
Hall said, however, that people have a stronger bond with their horses than people have with other livestock, so giving up horses will be a difficult decision.
"Most people do seem to be expecting higher hay prices and they're finding ways to cinch up their belts," said Scott Pierson of Silver Lake, Ore., the Oregon Hay and Forage Association president. "They need to pin down their hay now and not have to worry about finding it later.
"Hay is going to be an exciting commodity this year, and those buying it are going to be paying more attention to it," Pierson said.
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NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted
material herein is distributed without profit or payment to those who have
expressed a prior interest in receiving this information for non-profit
research and educational purposes only. For more information go to:http://www.law.cornell.edu/uscode/17/107.shtml
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted
material herein is distributed without profit or payment to those who have
expressed a prior interest in receiving this information for non-profit
research and educational purposes only. For more information go to:http://www.law.cornell.edu/uscode/17/107.shtml