“Hay prices this year will again be record-high and all regions of the U.S. have set increases compared to 2011,” say analysts with the Livestock Marketing Information Center (LMIC).
LMIC analysts explain the states experiencing the stoutest average price increases are those on the western side of the 2012 severe drought zone. For perspective, they point out that hay in North Dakota remains the least expensive, but at a $90/ton average through the last 10 months, that’s 43% higher than in 2011.
“Expect prices to remain high through the winter,” LMIC analysts say. “…This year will likely be a much more difficult year than last year in terms of finding hay. Not only has the drought had a much larger impact area, but winter weather conditions last year were very mild, so hay disappearance was much smaller in 2011 than normal. National hay stocks are expected to be very low in the spring, and could be the smallest ever.”
Industry At A Glance: Rising Hay & Alfalfa Costs
As for other feed, Friday’s World Agriculture Supply and Demand Estimates (WASDE) boosted this year’s corn yield a touch, raising estimated production by 19 million bu. That dropped the season average WASDE price for corn 20¢ at the midpoint to $6.95-$8.25/bu. According to analysts, the lower estimated price mostly reflects a lower-than-expected September price and the continuation of weakness in cash and deferred futures prices over the past month.
Incidentally, Glynn Tonsor, Kansas State University agricultural economist, pointed out this week that the range in cow-calf profitability – the gap between the most profitable and least profitable operations – grows wider in the wake of drought as folks address increased costs differently. He made the comment during this week’s quarterly Beef Economics webinar – presented in part by BEEF Magazine.