Farmers see sharp rise in price of hay after drought | nnbusinessview.com

Farmers see sharp rise in price of hay after drought

Rob Sabo

Weak snowpack in the Sierra last winter left Nevada’s pasture and range lands in sorry shape for the spring and summer alfalfa harvests.

Irrigated lands then withered under months of relentless summer sunshine, and Nevada’s wild-growing meadow-grass hays, which typically are cut and bailed, weren’t available for livestock.

Combined with the unprecedented increase in the use of corn in ethanol fuel, which has caused commodity prices to skyrocket, the net result is huge price increases for livestock feeds and hay users aren’t the only ones feeling the pinch.

Lacking meadow-grass hays for livestock, ranchers bought high-priced feed, says Marty Owens, head of the Nevada Agricultural Statistics Service.

As a result, the seven-state region that includes Nevada, California, Oregon, Washington, Idaho, Utah and Arizona is expected to have a lower cattle inventory next quarter as ranchers, unable to turn a profit because of high feed prices, cull their herds.

The drought also restricted the amount of hay for sale, says Tom Harris, director of the University of Nevada, Reno Center for Economic Development.

“With any drought, you are not growing as much as you can. If you are putting cattle on the range, given the conditions, that’s putting extra demand on hay. The other resources just aren’t there,” Harris says.

Don Gephart, who tracks agricultural statistics for the Nevada Agricultural Statistics Service, says alfalfa hay sold for $107 a ton last August. In the same month this year, it went for $142 a ton. All varieties of Nevada hays averaged $90 a ton in August of 2006, and increased to $155 a ton through August 2007.

Timothy hay, Nevada’s most expensive and sought-after hay, currently averages $160-$220 a ton, Gephart says. California thoroughbred racetracks value the hay for its exceptional nutritional qualities.

Livestock owners can’t turn to lower-priced alternatives. The price of corn topped $3.50 a bushel this year, double the 2006 price. Wheat is at nearly $6 a bushel, compared with $3.25 just 16 months ago.

Alfala hay is Nevada’s primary agricultural export, much of it going to California dairymen who value the crop’s high vegetable nutrients, says Harris. Nevada shipped nearly 300,000 tons of hay to California in 2006.

The higher costs caused a sharp increase in the price of milk. Between 2006-07 milk sold for about $12 per hundredweight; currently it sells for about $22 per hundredweight.

“Alfalfa is a big portion of roughage for cattle. That’s why your milk has gone up so much,” Gephart says.

Joe Leisek, owner of Remolino Ranch, has been buying hay for more than 20 years and uses about 1,300 bales annually at his horse-breeding ranch in Washoe Valley. Leisek says earlier this year in Eureka he found 1,000 bales at $10 a bale. But when he needed a smaller amount he traveled as far as Susanville for a good quality grass-alfalfa mix and paid $10 a bale for sixty bales.

“The people raising hay are putting out quite bit of money for machines, land and fuel. It is tough on consumers and on producers,” Leisek says. “You pay what you have to pay when you have multiple animals.”

Linda Vogedes works as coordinator for the University of Nevada, Reno Equestrian Center. Boarding costs at the center have not been affected by the higher prices, but Vogedes expects her suppliers eventually must pass on the rising cost of bulk hay.

“We will have to evaluate how much it increases and whether we have to go up with our boarding prices,” she says.

Cindy Oxley works as co-manager at Green’s Feed on North Virginia Street. Green’s Feed raised its per-bale prices several dollars to offset the rising cost of bulk hay.

“We have seen incredible increases,” Oxley says. “In the past seven months we’ve seen the price of grass hay go up $70 to $80 a ton.”

Even if the Sierra receives a good dose of snow in the coming months, allowing meadow-grass hays to flourish next spring, hay prices are likely to remain high. Current shortages won’t go away quickly, nor will the ripples caused by high prices for other livestock feeds.

Still, a wet winter gives the industry a strong start. “The main thing is to have a good winter so you will have good range conditions,” Harris says.


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