August 19, 2009

Wet conditions this spring and summer have created an abundance of hay for the upcoming winter feeding season.

The increase in volume is welcome news to many hay and livestock producers who suffered through the droughts of 2007 and 2008 that kept hay supplies below normal across much of the state. The increase in supply means demand will be lower than in past years. This likely will drive down prices across the state.

"The abundance of hay this year will drop prices, especially for hay that's fed to cattle," said Tom Keene hay marketing specialist in the University of Kentucky College of Agriculture. "The higher quality hay that is used for horses will also see a drop, but it won't be quite as dramatic as with hay for cattle. High-quality forages in square bales are still going to command a decent price."

While hay supplies are in good shape here, that's not the case in other parts of the country. Texas is experiencing a severe drought, and hay supplies will likely be short there. Growers in western states had trouble with wet conditions early on in the season and delayed first cuttings, but recent dry conditions should allow them to boost their supplies with later cuttings.

Keene said Kentucky hay producers may have an interest in exporting some of their excess supply to livestock producers in drought areas, but they should consider hay quality and transportation costs when determining a price for their product.

While hay is plentiful in the state, several quality issues exist due to delayed harvests. Ideal haymaking conditions were few and sporadic this year.  Many first cuttings were delayed, but growers who planned for at least two cuttings this season likely will still get them. Keene said many second cuttings were made in the past seven to 10 days.

Growers who applied nutrients to fields early in the spring likely saw an increase in volume and quality of their hay. However, high fertilizer prices kept some farmers from applying nutrients then, which means some of the hay crop may lack sufficient quantities of nutrients.

Since questions exist about hay quality, it is extremely important for producers to get their hay tested this year, Keene said.

"Hay producers sell their product, either through cash markets or their livestock; so it's important that they know about the product they are selling," he said. "Knowing the hay quality helps with pricing and allows livestock producers to come up with formulas for feed rations this winter."

The Kentucky Department of Agriculture offers hay testing services.  Producers can contact their local agriculture and natural resources extension agent if they need more information or want to have their hay tested through the KDA program.

In addition to testing their hay, producers may want to apply nutrients to their fields in the next few months to help them recover from previous drought years, especially if they've held off in the past due to high fertilizer costs.  Nutrient costs are significantly lower than in past months. 

In a survey of median prices of various Midwest retailers, Diammonium phosphate (DAP) prices dropped a total of 55 percent by July compared to the record highs of late fall 2008. Urea recorded a drop of 30 percent, and potash declined 18 percent during the same time frame.  Despite the lower average prices, differences in prices among retailers for the same product ranged from around $150 to more than $400 per ton, depending on the fertilizer.  This is partially due to many retailers trying to recoup the costs of stock purchased when prices were high.

"This is a good time to shop around," said Greg Halich, UK assistant extension professor in agriculture economics.  "You can truck fertilizer a long way to make up even a $100 per ton difference in fertilizer price."

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