Total hay supplies for the 2017-2018 crop year (May through April) are down almost 2% from last year, given smaller hay production this year, yet national average hay prices were surprisingly weak in August.
The Livestock Marketing Information Center’s Livestock Monitor, a newsletter for extension staff, said August grass hay values were down 25% in Oklahoma, the third-largest non-alfalfa hay producing state. Texas, the largest producer of non-alfalfa hay, were down 5%, while California, Minnesota and Ohio recorded double-digit percentage declines in non-alfalfa hay prices from July to August.
The August decline reversed the trend through July where lower hay supplies and more hay-consuming animals in the US had prices tracking above a year earlier.
The USDA’s National Agricultural Statistics Service had estimated US hay production would be close to 132 million short tons in 2017, down 3 million from last year.
The decline in hay stocks matches a 2% annual increase in US roughage consuming animals, mostly because of an expanding beef cattle herd.
Nationally, alfalfa hay production was pegged to be down 4%, and all other hay production was expected to be down 1%. Average alfalfa yield is down 5% from a year ago, explaining all of the declines in output, as alfalfa area harvested increased 1% from 2016.
OKLAHOMA CARRYOVER STOCKS LARGE
Oklahoma’s carryover hay supplies were the highest since 2008 and tripled the inventory on hand in April 2012 when Oklahoma experienced its last drought. These large supplies, coupled with favorable weather for pastures in August in Oklahoma put pressure on hay prices even though current year grass hay production is about the same as last year.
Also, Oklahoma’s alfalfa hay production is up more than 40% from 2016. Cattle producers in the Southern Plains are looking at a much-improved situation from a year ago.
PRODUCTION DECLINES REGIONAL
Northern Plains states experiencing severe drought had the biggest declines in alfalfa yields. North Dakota was down 32%, South Dakota was down 12%, and Montana was down 10%. Minnesota yields were down 15%.
August calf prices were up 8% from August 2016 while grass hay prices were 12% lower than a year earlier. The ratio of Oklahoma City steer calf prices (500- to 550-pound) to that state’s grass hay prices this August was 2.61:1, compared with 2.12:1 in August 2016 and 3.69:1 in August 2015.
Nationally, range and pasture conditions have traced a typical seasonal pattern, declining from the spring to the fall as summer heat and dryness take a toll. In 2016, range and pastures rated in good to excellent conditions at mid-year were at 59%, declining to 46% by mid-October.