Drought elsewhere upping prices for northern Colorado hay growers, buyers
August 8, 2011
Although it’s been anything but dry in northeast Colorado in recent weeks, local farmers are still feeling the effects of the ongoing heat and drought in other parts of the state and country.
Lack of moisture in southern Colorado - where 12 counties were declared disaster areas by the federal government recently - and in neighboring states like Kansas, Nebraska, Oklahoma, Texas and New Mexico – is leaving farmers in those areas struggling to grow feed for their livestock. That is driving up the demand and price of hay for producers where the crop is still growing.
At the end of July alfalfa prices across the board for northeast Colorado were about $50 to $70 higher than they were a year ago. Prices ranged from about $190 to $210 per ton for premium alfalfa down to about $140 to $150 for fair quality hay.
“On the one hand, you like it as a hay farmer because you can sell your commodity for a higher price,” said Jerrold Brethauer of Kersey, Colo., who farms about 110 acres of hay on his own land and helps custom cut about another 2,200 acres. “But on the other hand, you don’t want to see the high prices hurt the livestock industry.”
“You’d like to see a situation that works for everybody,” added Brethauer, who said he sells most of his hay to local livestock producers, but knows other Weld farmers who are getting requests from out-of-staters struggling with drought. “But I’ve learned from my years of farming that’s usually not how it works out.”
Jerry Sidwell of Gill, Colo., owns livestock and said he’s in good shape for now due to the abundance of grass on his land from the recent rains. But come winter, when the grass dies, it might be anther story.
Recommended Stories For You
“A shortage of hay or high prices definitely could make things interesting,” Sidwell said.
Sidwell and Brethauer further worried that it could really “make things interesting” for local feedlots, and especially dairies in the future as they try to operate with higher-priced hay while also attempting to meet the increased demand for milk production, much of which stems from the incoming Greeley, Colo., Leprino cheese plant.
However, both Steve Gabel at Magnum Feedlots in Eaton, Colo., and local dairyman Les Hardesty weren’t overly concerned.
“I think we’ll definitely be able to tell a difference with the price increases … but hay roughage only makes up a percentage of the feed we give to our livestock,” Hardesty, said, noting that corn silage and other supplements make up a large parts of the diet in their cattle. “It won’t keep us from operating.”
Stephen Koontz, an associate professor and agriculture economist at Colorado State University, said farmers shouldn’t expect the price of hay to drop anytime soon, not while high corn prices are keeping farmers planting more acreage of that crop and keeping the supply of alfalfa hay at a minimum, in addition to the ongoing drought that’s causing an even shorter supply.
But that sits fine with Don Leonard of Brush, Colo., who serves as the vice president for the Colorado Hay and Forage Association.
“This may not be what everyone else wants to hear, but this is probably where hay prices need to be,” he said. “With all of our input costs shooting through the roof, we couldn’t make a profit if prices were still where they were a year ago.
“I understand that the livestock guys need to make a living, too. But they’ve had very affordable hay at their disposal for a long time.
“I guess I’m just one of those guys who wants to see something work for everyone. It’s just tough for that to happen in this industry.”
Leonard is also one of those guys, along with Brethauer, who wants a break from the ongoing rains in northeast Colorado. After a first cut in June produced high-quality hay, Leonard’s ongoing second cut hasn’t been as successful.
Too much moisture can cause the same kind of mold problems in hay as it can in other crops.
Another issue stemming from the continued drought elsewhere, as in any drought, is farmers in those dry areas selling their livestock early because of the high costs or difficulty of keeping them fed.
However, Koontz said that now is a good time if farmers have to sell early since cattle prices are good.