Hay prices finally returning to pre-drought levels in northern Colorado
June 6, 2014
Hay Prices Not As Low Elsewhere in Colo.
Hay prices throughout Colorado have fallen some, but because of continued drought in other parts of the state and continued demand for supplemental feed, places like southern Colorado and the West Slope haven’t seen prices drop to the extent they have in northeastern Colorado.
In southeast Colorado and in the San Luis Valley, alfalfa prices were at about $180-$200 per ton Thursday, according to a USDA report, and in the mountains were at about $200-$250 per ton.
Northern Colorado hay buyers are getting some relief — not only in that this year's first cutting is underway, but also because more supplies and decreased demand have helped drastically lower prices from the record highs seen during widespread droughts the last three years.
According to a U.S. Department of Agriculture report released Thursday, high-quality alfalfa prices in northeastern Colorado are at about $150 per ton — resembling what it was in early 2011, before a historic drought in Texas and more widespread U.S. drought of 2012 dwindled pasture grass and hay supplies, forcing feed prices to skyrocket.
Throughout the droughts, prices for high-quality hay were typically in the $250-$300 per ton range, or more, and prices of other qualities of hay also hit historic highs.
The high prices tightened profit margins for those in the livestock industries, or eliminated them in some cases, and also forced some dairymen, ranchers, feedlot operators, horse owners and others to change up their feed rations, depending less on high-quality alfalfa.
In addition to paying a lot, livestock owners in some cases were traveling as far away as Canada to get their feed.
Last year, a USDA report showed that U.S. hay stocks on May 1 were at a record low for that date.
But supplies around the U.S. have recovered during the past year, and in northeastern Colorado — where abundant moisture since last fall has pastures looking better than they have in quite a while — hay is also now in lower demand, helping lower prices more so.
"I'm a pretty happy guy right now," said Ray Peterson, a Nunn-area rancher and president of the Weld County Farmers Union, who said as recently as a few weeks ago, he was still paying $220 per ton for hay, so prices falling more recently to about $150 was "wonderful news."
While a number of larger livestock producers grow their own hay, helping save dramatically on their feed costs, smaller producers like Peterson, don't have such resources and depend heavily on good grass, and when that's in short supply, they have to buy all of their supplemental hay from other growers.
"When you have good pasture grass, and hay prices are low, it helps tremendously," he said. "There's no getting around that. The situation we have right now is something we haven't had in a while."
In addition to being affordable, this year's hay crop is looking good, according to Bruce Bosley, a Colorado State University Extension crop specialist, who serves northeast Colorado.
"It's not exceedingly tall, but tonnage and quality should be good throughout the region," he said.
Late freezing temperatures in the spring of 2013 got last year's first cutting off to a slow start, which, along with other weather events, impacted total production. During the 2013-2014 hay marketing year — May 1, 2013, to April 30, 2014 — hay production was actually down 22 percent in Colorado compared to the previous year, leaving Colorado's hay stocks on Friday down 11 percent compared to the previous year, explained Katelyn McCullock, a dairy and forage economist with the Livestock Marketing Information Center in Denver.
However, well-above average hay stocks in neighboring states — like Kansas, where hay stocks are now 91 percent above last year's supplies — coupled with the decreased demand for hay, because of improved pasture conditions, has northeastern Colorado livestock feeders sitting in a good situation.
"With pasture and range grass looking as good as it does, you're just not going to see the demand for hay that you've seen in recent years," said McCullock, adding that twice as much of the state's pasture and rangelands now are listed as in "good condition" compared to this time last year. ❖