Pacific Northwest hay producers hope less inventory contributes to higher prices this season, but that could be hampered by too much rain at the wrong times.
ELLENSBURG, Wash. — The amount of old crop hay stored on Pacific Northwest farms is down 38 percent from a year ago, marking a return to normal inventories that growers and exporters hope will help rebuild prices.
There were 330,000 tons of hay on Washington farms on May 1, representing 10 percent of 2016 production. That’s down 17 percent from a year earlier, according to USDA National Agricultural Statistics Service.
Oregon totaled 270,000 tons at 7 percent of 2016 production and down 39 percent from a year ago. Idaho was at 510,000 tons or 10 percent of 2016 production and down 46 percent from a year ago.
NASS said 2.09 million tons moved off Idaho farms from Dec. 1 through May 1, 2.03 million left Oregon farms and 1.17 million tons were sold from Washington farms.
A year ago hay stocks were up 16 percent from the year before as hay remained backlogged from a labor dispute slowing down West Coast seaports in 2014 and 2015. Weather also contributed to oversupply of lower-quality feeder hay.
Lower inventory is due to a lot of acres coming out of production last year because of low prices and a long cold winter and cool spring requiring a lot more feeder hay for cattle, said Shawn Clausen, a Warden, Wash., hay grower and vice president of the Washington State Hay Growers Association.
“Normally cattlemen feed hay 60 days in winter and this winter it was more than 120 days in the whole Northwest,” Clausen said.
“Snowpack covered feed that would have been available, like corn stalks, so cattlemen had to feed twice as much hay and it cleaned up a lot of off-quality hay,” he said.
Growers and exporters have had to sell large amounts of hay at below break-even prices, but now with oversupply gone there’s a chance for prices to improve if weather allows a good 2017 harvest of less acreage, Clausen said.
Mark T. Anderson, CEO and president of Anderson Hay & Grain Co. in Ellensburg, one of the largest West Coast hay exporters, said low milk prices in the U.S. and China are limiting dairy demand for alfalfa in both countries.
“We are waiting to see what will drive energy into the alfalfa market. Pricing has been low and we need to see improvement in that. It’s hard to get margin,” Anderson said.
The Timothy inventory has cleaned up well, the Timothy market is healthy and, depending on the weather, it should regain good pricing this summer, but alfalfa is questionable, he said.
Prices bottomed out at around $75 per ton for feeder hay in December and January and $105 to $110 per ton for good export quality, Clausen said. Those prices are well below production costs, he said.
Now feeder hay is up to about $100 per ton and there isn’t any export hay, he said. Quality, which is dependent on the weather, will determine new export hay prices, he said.
Supreme and premium alfalfa reached $300 to $370 per ton in California in 2014, driven by a hay shortage before the port slowdown. Feeder grade was $220 to $240.
By the end of 2015, supreme and premium was $180 per ton and feeder hay was under $150.
“It’s a good thing to have less inventory, but it’s been painful and we can’t sustain low prices. We will go broke if we keep this up another year or two,” Clausen said.
Early cuttings this spring in California have been damaged by rain, which should increase demand for premium Northwest product, he said. But Anderson said he doubts California damage is enough to help Northwest sales.
Dairies are spot buying alfalfa when they need to, not locking up inventory for a year ahead like they once did, Clausen said. They also have turned more to triticale, a rye-wheat cross, in the past five years that along with corn makes cheaper feed, he said.
Clausen normally starts his first cutting alfalfa about mid-May but last year started April 20 because of the warm, early spring. Warm weather produced high yields, contributing to oversupply.
This year’s cooler spring means his first cutting will be closer to between May 20 and June 1 and he believes his yield will be down 15 percent.
Alfalfa swathing started May 1 in the Tri-Cities.
“The weather forecast for the rest of the month is not positive for putting up hay,” Clausen said. “If we can put up a good premium product, there will be demand for it. If the weather is such that everyone puts up feeder hay, we will overload the market.”
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