High Hay: Wyoming’s producers can use production, marketing strategies to maximize profits

According to a Feb. 16 report from USDA’s Agriculture Market Service, premium to supreme large squares of alfalfa hay in eastern Wyoming sold for $265 to $267 per ton, and utility large squares even sold for $215 per ton.
    Most of Wyoming’s hay producers have already sold out for this winter, and, because of several market factors, many in the forage industry expect the high hay prices to continue through 2012.
    Of 2012, Wyoming Business Council Crop and Forage Program Manager Donn Randall says, “The person who will come out the best this year is the marginal hay producer who doesn’t put up the best hay, but does have hay that’s for sale and that meets basic quality standards.”
Several factors drive hay prices
    Randall comments that one factor with a big influence on hay prices is the dairy industry, and he say if milk prices continue to stay high, as well as beef prices, then the strong demand for hay will remain.
    He says another factor is the Chinese market, which will double its milk production by 2020, and that they’re looking for millions of tons of hay, which will likely come from the northwestern United States. A delegation from China was expected to meet in Cheyenne on Feb. 23 to make direct contacts with producers.
Market timing
    “If there are isolated cases that have additional hay to market now, that sure would be a smart market move from the producer’s standpoint,” says Randall, who adds that most hay producers contracted their hay earlier in 2011.
    “We have one stack of hay we kept to sell until after the first of the year, for people who didn’t get their hay, or didn’t get enough, and we just started advertising it,” says JoAnn Milne, who raises hay with her husband near Casper. That hay is now listed online at $250 per ton.
    Casper-area alfalfa producer Bill Kossert says he sold out of his hay, except for some he held back both for a ranch he manages, as well as some local customers.
Fertilizer will offer good returns
    To make the most of positive markets in 2012, Randall says all forage producers should consider applying fertilizer to their crops this year.
    “If a producer isn’t used to putting too much fertilizer on their alfalfa or grass hay, this is the year that would pay for that input cost, because you’ll get a much higher yield, and the demand and the prices are there,” he says. “Fertilizer would make a big difference.”
    “We started fertilizing last year, and we’ll do that again,” says Kossert. “We put the fertilizer through our pivots, and we were very happy with it.”
Replace aging stands
    He also recommends replanting and replacing older stands to return them to optimal production. He mentions a project that included a grant and producers who rotated Roundup Ready canola with their alfalfa ground in the Sheridan and Riverton areas.
    “If a producer has an old alfalfa field with foxtail barley and dandelions that only produces a quarter of what it used to, they could plant something like the Roundup Ready canola. They averaged 25 pounds of canola per acre, and we sprayed the weeds with Roundup, then replanted the ground to alfalfa,” explains Randall. “Beckton Stock Farms near Sheridan says the new alfalfa stand after rotating with canola is the best field they’re ever had on the ranch.”
    He says barley or other crops would also make a good rotation, but the canola was ideal because of its Roundup tolerance.
Consider square bales to add value
    Randall also recommends that producer who traditionally round bale should consider contracting some of their hay to be custom square baled.
    “Putting up hay in square bales would add value, because the truckers coming out of North Dakota with flatbeds are looking for backhauls to Texas, and they don’t want to haul round bales, especially if they’re not used to it,” notes Randall.
Market optimization
    For those producers who don’t traditionally market their hay, but who might be looking to capitalize on the markets, Randall recommends they enter hay shows to get their name out to the public.
    “If their sample ends up going to the World Dairy Expo or the Tulare, Calif. show, there’s a lot of people who look at that hay, and there are a lot of dairy markets in the Midwest that haven’t been tapped,” he states.
    As another marketing tool, some hay producers have started to list their hay with online websites.
    “This is the first time we’ve ever put hay on the internet,” says Milne. “We’ve used it with good results.”
    She adds they’re also preparing to advertise their hay with regional livestock publications, and that they use regional market reports when pricing their hay.
    Kossert says he will contact an order buyer in Texas for his 2012 crop.
    “When we make the first cutting I’ll give him a call,” says Kossert.
    Kossert says he also sees a lot of hay locally to the horse market.
    “There’s a little more money in horse hay than normal cow hay, and we’re striving to make better quality hay to get more money for it,” he says, adding that it includes some small square bales, as well as 3×3 square bales, which are a little lighter and can be handled more easily by small tractors than the larger squares.
Local versus distant
markets
    “We try really hard to keep our prices competitive, particularly for the ranchers around here,” says Milne, noting that for the past few years all their hay has sold within a 100-mile radius. “We could have sold the hay for more and shipped it out of state, but we decided that a good portion needed to go to people around here. It’s important to take care of your own people first.”
Into the future
    Looking down the road, Kossert says he thinks hay prices will remain above recent years.
    “I’ll say there will be an average price of about $190 per ton for a fair quality hay,” he notes. “The better quality hay will go for about $40 more.”
    Randall agrees, saying he expects hay markets to remain higher than the last few years’ levels.
    Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at christy@wylr.net.

Wyoming hay places well in California
Tulare, Calif. – A total of $18,000 in prizes was awarded to winners of the 2012 World Ag Expo Forage Challenge, presented by Mycogen Seeds. Finalists were chosen from 77 entries from nine western states.
    Wyoming sent two sample to the contest, and Dave Hinman of Hardrock Farms near Wheatland took third in the alfalfa category of the contest, while Brendan Thoman of Riverton placed tenth with his alfalfa.

Transitioning to Roundup alfalfa
    “I don’t know how many producers in Wyoming will use Roundup Ready alfalfa this year, but if I was a producer I sure would look at using it,” says Wyoming Business Council Crop and Forage Program Manager Donn Randall. “It allows them to control weeds, instead of feeding weeds all the nutrients and water intended for the alfalfa. Since alfalfa producers are paid on yield, they would get more hay that’s worth more.”