Drought, Switch to Planting Corn, Soybeans Means Tight Hay Supplies

Missouri’s hay crop has taken a beating this year, thanks to prolonged drought and farmers’ switching to more profitable plantings of corn and soybeans.

Earlier this month Missouri Governor Jay Nixon requested that the USDA Farm Service Agency open up conservation reserve lands to livestock grazing to help make up for the state’s hay shortage.

And the recent trickling of rain won’t help things much at all.

Last week’s “Weekly Hay Summary” from the Missouri Department of Agriculture outlines what is a fairly simple conundrum: Supplies of hay are tight, demand is high and prices are firm.

“Farmers continue to have a difficult time locating any hay to buy as those producers that may have some hay are holding very tightly to the limited supplies,” the report noted. With many beef producers thinning their herds in southern parts of the state, they are using what hay they have to feed the remaining cattle.

Average prices per ton of dry hay for June in Missouri came to $91, up from $71 a year ago and $68 in 2010, according to the National Agriculture Statistics Service. Alfalfa, which is a more nutritious feed, gets better prices and has jumped even higher in the last two years, climbing to $190 per ton in June. That price is $50 higher than what it was the same time last year, and $65 more than what alfalfa fetched in June 2010.

Whitney Wiegal, an agriculture business specialist with the University of Missouri Extension, cites shrinking supplies as the main driver behind prices. “A couple years ago it was a little bit easier to come up with hay,” he said. “It’s as high as I’ve ever seen.”

Wiegal attributes much of this to drought conditions, not only in Missouri but also last year’s severe droughts in Oklahoma and Texas. Since hay is what Wiegal calls a “bulky commodity,” meaning it is expensive to transport, buyers typically look to local sources for hay.

But with local hay crops and grazing land suffering from catastrophic drought in Texas and Oklahoma in 2011, buyers last year looked outside their home states for hay, including Missouri. As a result, Missouri’s exports contributed to increased prices within the state last year.

A good portion of the hay produced in Missouri went to drought-stricken Texas and Oklahoma. Charles Buckner, a dairy farmer in Fair Grove, Mo., feels the pinch as hay and other input costs rise at the same time as the price of dairy products fall. “It’s cost us a lot. Dairy is down a bunch. Milk is way down,” he said.

Buckner gets most of his hay from about five sellers centered mostly in northern Missouri. “I buy a lot, feed a lot of cattle.” Last year, Buckner saw prices nearly double. He hasn’t started buying his hay feed for this summer, but he expects prices to be high as well.

Drought isn’t the end of the story, though. Wiegal said that growing hay isn’t typically a profitable enterprise, but growing corn and soy is very profitable these days with prices for those crops very robust.“Pretty much anything that can go to corn and beans will go to corn and beans,” he said.

The land leftover for growing hay is generally too steep, too rocky or has too much clay to grow soy or corn. With the weather still dry and corn and soy prices still high, the pressure s on hay supplies aren’t likely to subside anytime soon.

“It looks to me like hay prices will stay high through the summer,” Wiegal said.

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