The Value of Wyoming HayWritten by Donn Randall
By Donn Randall, Wyoming Business Council Crop and Forage Program Manager
On a family trip to South Dakota over the 4th of July weekend, I had plenty of windshield time to evaluate crop conditions, livestock, farm landscaping and the general agricultural economic conditions.
It is easy to see the major agronomic crops once you’re east of North Platte, Neb., as more and more corn and soybean fields from the east line the road. As a tourist entering Wyoming on I-80 from the east, determining the dominant agronomic crop becomes somewhat of a challenge for the average passing motorist. In fact, if I were to ask some of our Wyoming residents what the number one agronomic crop in Wyoming is, I bet I could get at least six different answers from six different people.
So, what is Wyoming’s number one agronomic crop? Some people may say barley, corn, wheat or even sugar beets, and all would be incorrect. The number one agronomic crop in Wyoming, generating $271 million dollars in valued assets in 2009, according to the 2010 Wyoming Agricultural Statistics report, was hay. The second agronomic valued crop was barley, which generated one-sixth the revenue of hay.
What makes Wyoming hay so valuable, and how can producers maximize their marketing potential for additional hay production? Without a doubt, Wyoming has a very unique, valuable alfalfa crop compared to all Midwestern states. The hay nutritional values are so much higher here than in other states, due largely to a combination of Wyoming’s elevation and cooler nights, which allow the alfalfa plants to actually rest at night, reducing the concentration of minerals in the stems. To some this may seem a disadvantage, but from a livestock feeding standpoint, it allows the entire plant to contain much higher crude protein (CP), relative feed value (RFV) and total digestibility (TDN). In other words, pound-for-pound, Wyoming hay provides more nutrients to the animals than any other hay. It is not uncommon to have Wyoming alfalfa hay test at 23 percent CP, well above 230 RFV and have a TDN percentage in the high 60s to low 70s. These three analytical values are what potential hay buyers are most interested in when discussing potential hay purchased from Wyoming producers. This is also why Wyoming hay producers do so well at the World Dairy Expo Forage Super Bowl Challenge every year.
So, if Wyoming hay provides much more nutrients to livestock, why are Wyoming producers not selling more to out-of-state markets? The answers to this question are based upon marketing exposure, transportation costs and putting the hay in the correct package so that it can be easily transported to the buyer.
To begin with, marketing Wyoming hay is based entirely on establishing a positive and trusting relationship between the producer and buyer. Hay is an agricultural commodity that is not sold according to specified USDA commodity standards and cannot be bought or sold on any futures contracts. Wyoming producers could increase their marketing exposure by participating in their local county fair hay show, and then sending the same sample to the Wyoming State Fair Hay Show. The top five highest RFV alfalfa samples are then entered in the World Dairy Expo Forage Super Bowl Challenge in Madison, Wis. This is an international show that offers an opportunity for hundreds of people from around the world to see, smell, touch and even taste Wyoming premium hay. All of the samples from the Wyoming State Fair hay show are on display at the World Dairy Expo in the Wyoming premium trade show hay tent. An additional international hay show is the newly established forage challenge contest at the World Ag Trade Show in Tulare, Calif. during the first week of February.
Wyoming producers who have additional hay to sell need to realize their hay must be cut and baled at the most optimum time with excellent leaf capture and then must be analyzed. In addition to these very important criteria, the hay must be processed in the correct type of package. Unfortunately, export buyers do not accept large round bales, and most truck drivers refuse to haul large round bales out-of-state due to over-width issues and requirements for additional expensive permits to haul these bales. A three-foot by four-foot large bale can be loaded either on a flat bed or into a covered van trailer very easily. Even though a large square baler may initially cost more than a large round baler, the returns to the producer can be realized within three to four years. A Big Horn Basin hay producer said he can get a premium of up to $40 per ton from the sale of his three-by-four-foot square bales as compared to his round bales. At that rate, a producer could generate up to an additional $62,000 in sales over three years if the hay is processed through a large square baler.
The future market trends for U.S. hay prices also look as though they will continue to strengthen in the coming months. Several fundamental marketing trends may add strength to the hay market. These trends are: 1) many acres of alfalfa were plowed up and planted to corn this past spring, 2) dairy futures CME prices of Class III milk is currently at $20.60/cwt, 3) demand from export sales have seen an increase from last year at 22 percent, and 4) given the extreme drought and poor hay cropping conditions in the southern U.S., the demand for additional forage will create price movement for Western hay.