Hay Prices May Spike, Even If Cattle Futures Dip

Hold on to your hay.

Hold on to your hay. Prices of the fodder may spike thanks to the high prices of feed grains, even if – in fact, especially if – livestock values fall.

Hay prices have lagged other feed sources since the grains rally started last June, with official data showing prices of baled U.S. alfalfa rising 17% since then to $136/ton.

This reflects a long-term trend, fuelled by the reduction in the U.S. cattle herd, which has declined to its lowest levels since the late 1950s.

Hay values have risen some 60% since 1990, compared with a more than doubling in prices of feed grains, such as corn, which have found alternative industrial uses as sources of ingredients and biofuel.

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