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US Hay Stocks at Lowest Level Since 1957

21 January 2013
LMIC

US - December 1st hay stocks, reported by USDA-NASS, came in at the lowest level on record - which dates back to 1957 - at 76.5 million tons, according to the Livestock Marketing Information Center.

Over the last two years December hay stocks have dropped double digits each year, totaling a 25 per cent decline since the 10/11 marketing year. In 2011 a Southern Plains drought lowered stocks 11 per cent from the previous year, this year stocks were down another 16 per cent from the widespread drought in the Midwest.

Excluding 2011 and 2012 the 10-year average of December hay stocks hovers just over 100 million tons, averaging about 106 million. The 2012 figure was 28 per cent below that figure.

The stockpiles of hay have moved farther from the epicenter in what has been a two-year US drought. Last year, the largest decreases in hay stockpiles rimmed the Southern Plains, who felt the majority of the impact of drought on pasture and range conditions.

This year the impacts have spread a little farther north and actually some of the Southern Plains states saw hay stocks increase compared to a year ago and the Midwest had most of the year-on-year negative adjustments.

Seventeen states posted increases in December hay stocks, the largest was Louisiana, up 68 per cent, and second was Texas with a 61 per cent jump. The majority of increase was in the southern half of the US. Unsurprising, the largest decrease in stocks came from the Midwest.

Nearly all Corn Belt and High Plains states recorded decreases from the previous year. The largest decreases actually came from the upper Midwest: South Dakota was the largest with a 49 per cent drop, followed by Michigan, down 43 per cent.

The result of a very low hay stock number is a continued escalation in hay prices as we move through winter. How rapidly prices go up will depend on the weather. Dairy producer profitability estimates look unlikely able to handle significantly higher alfalfa costs. Expectations are for most of the increases in hay price to come from other hay.

Alfalfa seedings were up this year indicating a very small increase in alfalfa acres. Hay likely will have to battle for acres with corn and other crops, including soybeans in some parts of the US and cotton in other regions, as it has the last two years.

Current price points indicate few acres will come back into hay production but the biggest aid to output would be a more normal yield in 2013.



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