It’s been ten years since ‘Hay West’ shoved round hay bales into square rail cars to send to farmers in drought-stricken Saskatchewan and Alberta to feed their livestock. While there’s been no talk yet of ‘Hay East’ this year, one hay farmer describes the situation in Ontario as “the perfect storm”.
Alf Budweth, who farms 1300 acres in the Nobleton area with his brother Dave, considers their hay business to be a medium-sized operation in their area, selling horse hay and straw locally in large and small square bales. The brothers also own Nobleton Feed Mill and Budson’s Farm & Feed in Erin.
From all the reports he has heard, their 30 to 50 percent drop in hay yield this year is fairly typical. It depends on the field and the plant diversity, reported Alf, but “that’s half, and that’s been pretty tough.”
The lack of rainfall has been partly to blame, he says, but also cites the warm early spring followed by the insult of snow that either killed or stunted the alfalfa for the first cut.
From a larger perspective, he suggested that adding to the decreased hay yield is the pressure for land to plant other crops like corn, soybeans or even barley. The resulting limited supply of hay is reflected in the price this year, which Alf pins at 14 to 15 cents per pound right now. “That’s unheard of,” he says, especially considering last year’s price of seven to eight cents per pound.
Pricing on hay is “a moving target,” says Alf, with the final price depending on quantities and delivery charges, and it’s regional as well, with some areas in the province having rain and others being dry. “We don’t think 14 cents is the ceiling,” said Alf, “especially when the snow flies.”
Reports from the Elmira hay auction come in at 10 to 15 ½ cents per pound on July 25 over varying quality. South of the border, U.S.D.A. reports premium alfalfa hay was selling in July at auction for between $240 and $310 per ton in Pennsylvania, and premium mixed hay between $218 and $240 per ton with prices holding steady over the previous week.
Ontario hay is usually in demand south of the border, but Alf wonders if Ontario may become actually become a net importer of hay this year?
“There’s a lot at play,” said Alf. The dairy and beef guys who usually sell their excess won’t have any to sell as they hold back enough just to feed their own stock and may even need to buy. As it did in 2007, corn silage may take a bit of pressure off hay demand, said Alf, but as of today, “it’s a bad situation”.
Adding to the demand for hay is the parched pasture situation that has resulted in hay being fed through July. Last year the pasture was good until well into November.
The Budweth brothers will soon know how the yields will fare on about 400 to 500 acres of their second cut that is coming along nicely with a few timely rains. No matter how well second cut comes in though, Alf predicts the reality is that prices are going up: even if second cut comes off well it can’t make up for the low first cut yield.
With gas prices currently hovering around $1.27 per litre, shipping hay from other regions will not be cheap either.
Their inventories are “pretty much sold out,” reported Alf, and they’re not taking on any new clients. The horse industry is already negative and gloomy, and the hay situation doesn’t help, although Alf is still trying to stay positive.
“For those buying hay, you don’t have hay until it’s in your barn,” advises Alf, who predicts potential bidding wars for hay. It’s not a scare tactic, he says, just reality.
He suggests to secure your hay supply with your farmer, manage it well to reduce wastage and storage losses, and consider alternatives for horses such as high fibre complete feeds or hay cubes.
©2012 K. Dallimore. All Rights Reserved.