Mild weather, healthy hay stocks and financially strapped dairy operations will likely hold hay prices in check in 2020.
Nationwide, total hay production in 2019 was up 6%, and alfalfa hay production was up 3%. USDA has not yet released statistics on Dec. 1 hay stocks, but the Livestock Marketing Information Center expects they’ll be up nearly 10 million tons year over year.
“That will not be good for prices,” Steve Hines, University of Idaho Extension educator, said.
Dairies are just now getting milk prices above the breakeven level. They haven’t had cash to be able to stockpile hay, and they still aren’t buying, he said.
Weather is forecast to be mild this winter, pasture is good and drought isn’t an issue this year.
“We’re going in with a lot of hay, and it doesn’t look like it’s going to be one of those winters where guys have to feed a lot of hay,” he said.
That will delay demand until closer to first cutting, he said.
“I don’t see anything that’s going to push the price up further than it’s been this year,” he said.
Hay prices are seasonal and typically continue to decline coming out of winter. Dairy producers are waiting for new crop, and beef producers are pushing cattle back out to range, he said.
Prices on dairy-quality hay in southern Idaho this past year jumped to $220 a ton for a short time after first cutting because that new hay got rained on and high-quality hay was hard to find. But they quickly went down to $200 and ranged from $180 to $200 all summer. Feeder hay went for $130 to $150 depending on quality, he said.
Breakeven on hay above operating costs is $75 to $80 a ton. But above total costs, it’s $130 to $145 — making last year’s feeder hay prices kind of a problem, he said.
Last week, Idaho hay prices were $180 for dairy quality, $150 for good quality and $130 to $140 for fair quality, he said.
“If you want to be profitable, you have to get into that dairy market. That said, what (else) are you going to grow that’s profitable?” he said.
Hay prices really come down to milk prices, he said, adding that dairymen set the price of hay and until they get healthy and have cash flow, prices aren’t going to increase.
The price of milk is coming up, and Idaho is one of the few states that has increased the number of dairy cows. That’s going to increase hay demand a little, he said.
“Will that push the price of hay? I don’t think so,” he said.
While hay production in Idaho was down 9% in 2019, demand has been light all fall due to good pasture conditions and dairies buying on an as-need basis, he said.
“There seems to be a lot of hay under tarps on these farms,” he said.
Unless it stays cold in the spring or all first cutting is rained on, he doesn't see hay prices increasing.
"it's going to take a weird anomaly to push the price," he said