Managing Hay Prices

By Dallas Mount, UW Extension Educator

Harlan Hughes, well known livestock economist, said, “When Texas sneezes, the cattle markets get a cold.” His comment has proven to be true this year.

The severe drought in Texas and the south central region has had a major impact on many markets, and the hay market is one of those. Much of the hay that would normally sell for around $90/ton is selling for close to $200/ton this year. This has made it extremely difficult for many ranchers who purchase hay to find hay they can afford. If you raise your own hay, it should also make you consider the option of selling hay into this inflated market.

But what would you feed your cows? This can be a scary proposition to consider, but there are many ranches around Wyoming, and, yes, even those areas that receive good amounts of snow, that winter their cows on very little or no hay. For the past several years as part of the Ranch Practicum school (RanchPracticum.com), I have been collecting and analyzing financial performance records of ranches from across Wyoming and Nebraska. The one number most correlated with cow-calf profitability is the amount of hay fed per cow. Those ranches that feed the least hay are, on average, the most profitable ranches, and vice versa. This doesn’t mean these ranches are starving their cows in the winter. Many of these ranches have just as high reproductive efficiency as the high input ranches.

During this year of high hay cost, I would challenge you to evaluate your operation to see if there is potential to reduce the amount of hay required to get your cows through the winter. One option is the use of dried distillers grain (DDG), a by-product of ethanol production. This feed makes an excellent supplement for winter range or low-quality winter forage.

I evaluated two scenarios using a cow ration balancing software. A cow receiving all she can eat of winter range and five pounds per day of DDG will do better than a cow receiving 31 pounds of alfalfa hay, and get that done for about half the cost when using today’s high hay prices. There are also many ways of changing the cow’s production cycle to reduce her needs during winter months, such as calving closer to mid-spring or early summer.

Remember, your ranch is a business and it is likely a collection of enterprises that may include hay production, cow-calf, heifer development and a land business. As a business manager it is incumbent upon you to consistently evaluate alternatives, and as input prices and commodity prices change you should look for opportunities to cash in and for alternative inputs. Enjoy the fall.