It goes without saying that hay production is an essential component of a successful beef industry in the U.S. However, we often don’t think about the value of that hay production from a broader market perspective. That’s largely because it’s a highly fragmented business that’s somewhat difficult to track.
Nonetheless, the data in the chart represents the national or aggregate value of total U.S. hay production; it’s based upon total production estimates multiplied by average sales value. In total, the economics associated with hay production are significant.
What’s not represented in the chart, however, is the actual hay market. In other words, some hay trades hands multiple times, which underscores the importance of hay brokers in ensuring liquidity in the market. Their function is much like the role of order buyers in the feeder cattle market.
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The data indicate that the value of hay production in the U.S. is approximately $20 billion annually. Clearly, not all of that hay is sold off the farm or ranch, but it does represent a real value (opportunity cost) when fed to cows.
The hay market is likely more complex than many of us think about from a day-to-day basis. What are your perceptions of the hay market and its respective dynamics? How has the market changed during the past 10-20 years? How do you see it changing in the years ahead, assuming normal weather conditions?
Leave your thoughts below.
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