Posted: Thursday, May 17, 2012 11:00 AM
Other areas see numbers fall; prices remain high
By DAN WHEAT
The amount of hay -- sold and unsold -- stored on farms is down 34 percent from a year ago in Washington, up 150 percent in Idaho and about even in Oregon, according to the National Agricultural Statistics Service.
The combined May 1 old crop stock of the three states is 1.21 million tons, which is up 32 percent from a year ago while the national stock of 21.4 million tons is down 3.8 percent.
Stocks are down across much of the nation's midsection, mostly due to lower 2011 production, while up in the western half and Atlantic coast due to increases there, said David Knopf, director of the NASS Washington Field Office in Olympia.
The largest declines were in Texas, Oklahoma and Colorado due to drought, he said.
Stocks show supply remains tight, which maintains upward pressure on prices, said Mark Anderson, president of Anderson Hay & Grain Co., a major West Coast exporter in Ellensburg, Wash.
A lot of what remains from 2011 may be damaged or lesser quality hay, Anderson said.
"I don't know of a lot of premium export quality available in Idaho," he said.
Dennis Strom, president of the Idaho Hay and Forage Association, Hill City, said he sees no excess stacks. First cutting of the new, 2012 crop has started in Treasure Valley and Twin Falls, quality is good, but tonnage is down 50 percent in some places because of cold weather, winter kill and ground taken out of production, Strom said.
Washington hay, particularly Timothy, sold well in the past season because of less acreage in Canada and Australia having a poor crop, Anderson said.
With first cuttings of 2012 crop out of the Southwest maintaining $200 to $240 per ton, the big question is whether dairies, experiencing lower milk prices than a year ago, will continue to pay high hay prices, Anderson said. Prices could fall, he said.
Exporters face a greater risk than a year ago of paying too much for premium quality hay and getting caught in a price drop, Anderson said.
Nick Gombos, supply chain manager of ACX Pacific Northwest in Willmington, Calif., also a major West Coast exporter, agreed exporters' risk of getting caught with high-priced inventory is greater than a year ago.
Southwest prices already have started to slide to $200 to $225 per ton for new product, he said.
"Dairymen are very quiet. Exporters are doing most of the aggressive purchasing in the Southwest," Gombos said.
Idaho's oversupply reflects a slight increase in acreage and an overabundance of dairies and milk leading to dairy bankruptcies, he said.
"It's an isolated situation, but we've seen as much as an $80 drop in Idaho from $200 to $250 per ton last August to $150 to $170 now depending on quality," Gombos said.
Eastern Washington dairies and exporters can buy hay right now in Idaho at $10 to $20 less per ton than in their own area, he said.
Washington and Oregon May 1 hay stocks are down because of fewer acres planted due to high corn, wheat and soybean prices, Gombos said. Grain prices are softening and more alfalfa acreage may be planted this fall, he said.