27 July 2022

3 minute read

North America

I thought it might be worthwhile to briefly discuss the potential implications for forage production should current conditions persist. As an Extension economist in a very cow-calf oriented state, I would argue that it is never too early to think about winter hay needs. And, I think that might be especially true this year.

The fact that some producers in drought stricken areas are having to feed hay during a time of year when forage availability is typically not an issue, is significant. The point being that some portion of hay stocks are being drawn down in order to feed cattle this spring. The longer pasture conditions remain an issue, the more those hay stocks could be drawn down.

Second, there is the potential for dry conditions to impact hay production during the growing season. Again, it may seem early to be thinking about this, but we are looking at a very large portion of the US that is battling drought very early in the growing season. I think it would be naïve to think that there isn’t potential for lower hay yields, and increased demand for hay, if the situation continues.

Lastly, I would point out that while hay markets tend to be very regional, the potential for hay availability concerns are not just confined to areas dealing with drought. While hay is expensive to transport, the wider hay value differences across regions become, the more incentive there is to move hay into greater deficit areas. We have seen this in the past and this is one of the ways markets allocate resources when they become scarce.

Further, one should not ignore the potential implications of drastically higher fertilizer prices this year. Even in areas that have had ample moisture, it is very likely that producers will apply less fertilizer on hay ground than they normally do. If this occurs, there will be yield impacts that result in lower hay production in those areas as well. The net effect could be a much more limited supply of hay as we enter the winter of 2022 / 2023.

I call Kentucky home and the year 2007 is one that I will always remember. A spring freeze hammered our spring forage growth that year and drought impacted production in summer and fall. As we got into late fall and early winter, it became clear that hay was in much shorter supply than expected. Consequently, average quality grass hay prices more than doubled as producers scrambled to find hay to winter their cow herds.

Something else that I remember is that a lot of cow-calf producers ended up feeding commodity feeds, rather than hay, to their cows that winter. At that time, alternative feeds were relatively inexpensive, but that is not going to be the case this year. I am not necessarily predicting something like that for the current year, but I do think it is valuable context and drives home the importance of planning for winter hay needs early.

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