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Gasoline, Weather Fueling Hay Prices
by: Pat Raia
June 16 2008, Article # 12074
When her barn operator's hay supply fell short last fall, Kentucky horse owner Linda Jones struggled mightily with high prices and limited availability to keep her two Saddlebreds fed.
"I'm stocking up now," Jones said. "I don't know what the market will be like later."
Drought conditions in some major hay producing states, along with a demand for corn-based ethanol that prompted some farmers to switch crops, escalated hay prices in 2007.
This year high fuel prices will join wet weather in the Midwest, the ongoing California drought, and demand for corn to keep hay costly.
"Corn is a factor, but fuel is already $4 a gallon and (fuel is) going to be an even bigger factor this year," said Ron Tombaugh, a Streeter, Ill., hay producer and president of the National Hay Association. "Farmers have to pass fuel costs onto consumers."
In Illinois, early season hay prices ranged between $120 and $130 per ton. But fuel-related surcharges are adding between $2 and $2.20 mile to each delivered load, Tombaugh said. In Iowa where hay is selling for between $200 and $250 per ton, trucking charges are even higher.
"High fuel prices aren't going away, so I'm telling people that when they find quality hay they like to buy it now." -- Liz Blitzer, Hay USA"Delivery charges are running between $3 and $4.50 per mile and are quoted at the auctions," said Stephen Barnhart, forage agronomist for the University of Iowa Extension Service. "Delivery is usually free for the first 15 or 20 miles. But, after that, buyers have to negotiate with the truckers."
Farther west, lack of rain and urban competition for rural water sources have pushed the price of the alfalfa Liz Blitzer buys for her clients in Texas toward $200 per ton. With shipping prices running between $1,200 to $1,500 per load, she's forced to pass the cost on to her customers.
"The surcharge comes to about 50 cents per every $5 of purchase," said Blitzer, president of Hay USA in Weatherford, Texas, where alfalfa is selling as high as $512 a ton. "High fuel prices aren't going away, so I'm telling people that when they find quality hay they like to buy it now."
Good consumerism is critical, too. Blitzer advises buyers to calculate the cost of hay by weight, and to make sure an accurate weight label is attached to each bale.
"Some people are selling hay in 65 pound bales," she said. "But most farmers bale at 51 pounds. So find a seller you trust, and make sure you get what you're buying."
Agronomist Barnhart recommends buying in bulk.
"If the going rate is $200 a ton, it doesn't make sense to fill up your pick-up truck with 40-pound hay bales," he said. "If you're paying $7 a bale, that's $350 a ton. So before you buy, do the pencil pushing."
The advice isn't lost on Jones
"I've learned the hard way that you don't wait for a crunch to buy," she said. "Even if my backyard is covered with hay pallets, I won't be caught short this year."
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