Hay supply near 50-year low, prices near record highs
Short hay supplies and demand have now pushed hay bale prices toward record high prices
Hay supplies remain short and prices continue to rise as Texas cattle ranchers try to feed herds through winter, according to Texas A&M AgriLife Extension Service experts.
The 2022 drought and subsequent poor hay production resulted in stressed hay supplies going into winter, according to AgriLife Extension specialists. Those short hay supplies and demand have now pushed hay bale prices toward record high prices.
The U.S. Department of Agriculture Jan. 27 Texas Hay Direct Report priced large round bales of good-to-premium Bermuda grass between $70 and $175 each with prices for the same quality hay reaching $410 per ton in the Panhandle. Most counties across the state are reporting decent quality bales above $100.
Deeper than usual culling in preparation of that winter feeding shrunk Texas cattle numbers and the national herd to lows not seen since 2012, said David Anderson, Ph.D., AgriLife Extension economist, Bryan-College Station. Cattle producers expect good calf prices in the future but feeding cows until spring forages are ready to graze is the concern now.
Anderson said drought and high fertilizer prices were the two major factors that led to near-record low hay production. Grass needs soil moisture to grow during the summer hay season, but pastures also need fertilizer, especially nitrogen, to maximize growth and yields.
Vanessa Corriher-Olson, Ph.D., AgriLife Extension forage specialist, Overton, said $160 per bale was around the breakeven point during the 2022 season for hay producers who maintained pastures with average inputs due to the cost of fertilizer, weed and pest control applications. High commodity prices for grains, which are ingredients in supplemental feeds added alongside hay rations during winter, are exacerbating tight hay supplies.
“It’s no shock that hay prices are so high,” she said. “The drought, poor range and pasture conditions and high feed costs have all worked together against producers.”
Hay yields, supplies near 50-year low
Anderson said Texas pastures produced the lowest amount of hay since 2011. Hay yields averaged nearly 1.95 tons per acre over the last decade but totaled 1.56 tons per acre in 2022. Texas produced 4.44 million tons of hay in 2011 compared to 6.5 million tons in 2022.
The number of hay acres cut and baled was also down to 4.19 million compared to a 10-year average of almost 5 million acres.
U.S. hay production followed the Texas trend. According to the December 2022 hay stock reports, the 71.9 million tons of hay on hand was the smallest amount since the USDA began tracking forage supplies in 1973. Texas hay supplies were 37% below the December 2021 report and other Plains states like Oklahoma, Kansas and Nebraska were all at least 30% below their stocks last year. Hay stocks in southeastern states were also down except for North Carolina.
“So, you have less hay production in Texas, but you also have less production in all the states around you that might be a source to have bales shipped in,” Anderson said. “Usually, one region is dealing with drought and lower supplies and producers can go elsewhere for relief. Having less hay everywhere at the beginning of winter puts a strain on producers, even if there are fewer cattle to feed.”
Long-term outlook depends on rain, pasture management
Corriher-Olson said supplies are the concern now, but that pasture management will determine the long-term production in pastures. Many hay producers avoided input costs like fertilizer and herbicides during the drought. Some pastures received reduced fertilizer applications while other fields received nothing.
The reduced management and overgrazing during the drought could cost producers this season, she said.
Fertilizer prices have fallen some, but they remain relatively high, she said. Much of the state, especially the hay-producing region of East Texas, received good winter moisture and is poised for production while other parts of the state like West Texas, South Texas and the Panhandle remain relatively dry.
Long-term outlooks show the state has equal chances of moisture or drought until July, Corriher-Olson said. East Texas has higher chances of receiving rainfall after July.
Producers who maintained their pastures and avoided overgrazing in 2022 should be in good shape if good soil moisture is available, she said. Fields that were not fertilized or sprayed for weeds and/or overgrazed could have a difficult time bouncing back.
“Hay production in 2023 will depend on management in 2022,” she said. “Fields that were not managed will have a harder time recovering even with moisture and fertilizer because the first thing to respond will be annual weeds, and they will be competing with perennial forages.”
Whatever the case may be, Corriher-Olson said hay producers should be ready to capitalize on appropriate management, whether that is applying fertilizer or monitoring and treating weeds and pests like fall armyworms.
Cutting corners now could hurt future calf crops
Jason Cleere, Ph.D., AgriLife Extension beef cattle specialist, Bryan-College Station, said high grain prices have compounded the short supply of hay and high winter feed prices. In 2011, ranchers could rely on heavier rations of grain-based feed and less hay to meet the daily nutritional needs for cattle.
However, global events and the drought of 2022 have pushed grain prices much higher during this current drought cycle, he said.
Most producers culled their herd deeper than usual to reduce the number of mouths they must feed through winter. Some producers are looking for other supplemental feed options to cut costs where they can, but many options relate to availability and weighing the logistical cost and capabilities of each operation.
Whatever producers incorporate into their winter feeding plans, Cleere said they need to maintain cow body condition scores well enough to ensure those cows are ready to breed following this spring calving season.
“It’s a challenging year, but indications point toward extremely good prices for next year’s calf crop,” he said. “I suspect producers are going to be short on hay if we don’t get an early spring green-up. My main message would be: Don’t cut too many corners now that you can’t take advantage of good calf prices in the future.”