Hay Stocks Largest In 11 Years

US May 1 hay stocks, reported by USDA’s National Agricultural Statistics Service in their May Crop Production report, were the largest since 2005 at 25.14 million short tons.

Records maintained by the Livestock Marketing Information Center show it was the second year in a row that stocks had returned to historically normal levels from drought-depleted stocks in 2013 and 2014.

Year over year, May hay stocks were up 2.5%.  States that reported increased stock levels generally were the Plains and Western states.

Nebraska, Kansas, Colorado, Arizona, Oregon and Washington hay inventories were all up more than 10% compared with 2015.  Oklahoma, Texas, Wyoming, Idaho and California stocks were up less than 10% from last year.

Nevada, Utah, North Dakota and South Dakota were down 4% to 7% year over-year. and Montana was down 21% from 2015.

The Midwest, Southeast and Northeast were split in their stock level changes.  Minnesota and Wisconsin stocks were up 7% and 11%, respectively.  Iowa and Missouri were down 11% and 4%, respectively.

Indiana and Ohio showed significantly lower stocks than 2015 but Georgia and Florida posted double-digit percentage increases compared with 2015.

 

LOOKING AHEAD

 

Forage conditions appear to be starting the year off well.  Winter hay usage this past season was fairly normal, falling in line with expectations for the generally mild 2015/2016 winter.

Hay production for the 2016/2017 marketing year was forecast by the LMIC to be fairly even to slightly below last year.  Combining production with May 1 hay stocks shows a stable supply across the US.

Given weather conditions and feedstuff supplies, hay prices (alfalfa and other grass types) are forecast to be about 10% to 15% below 2015’s annual averages.  Unfavorable weather this summer could decrease production and forage availability and support hay prices.

The seasonal price index for alfalfa hay shows declining prices into January as hay production increases and livestock are grazed in pastures.

Hay usage this year was expected to increase since the US has made dramatic beef cattle inventory increases, but given current weather conditions it may be another year before the supply and demand interactions push hay prices up.

From an international perspective, 2016’s first quarter hay export volume was up but value was down, according to the USDA’s Foreign Agriculture Service.  Alfalfa export volume rose 35% from last year, but total value dropped 10%.

That was because of lower prices across the hay sector.  Average alfalfa exports were calculated at $344 a tonne in 2015 compared with $311 in first-quarter 2016.  The first quarter’s other hay export volume was up 2%, but value was down 13%.

Calculated other hay values averaged $342 a tonne in the first quarter of 2015 and $297 in first-quarter 2016.

 

CASH CATTLE MARKET QUIET

 

Cash cattle markets Tuesday were quiet with bids and offers not clearly defined as futures recovered stability after Monday’s limit-down close.

Cash cattle markets last week were steady on a live basis and up $2 to $3 on a dressed basis at $128 per cwt live and $208 to $210 dressed.

The USDA’s choice cutout Tuesday was $0.78 per cwt higher at $228.34 per cwt, while select was up $2.08 at $204.07.  The choice/select spread narrowed to $24.27 from $25.57 with 95 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $147.80 per cwt, down $0.95.  This compares with the Aug settlement Tuesday of $142.15, up $1.10.