A weekly report prepared by the staff of the Ministry of Agriculture and Food (OMAF) and the Ministry of Rural Affairs (MRA). If you require further information, regarding this report, call the Elora Resource Centre at 519-846-0941. Office hours: 8:30am to 5pm. For technical information, call the Agricultural Information Contact Centre at 1-877-424-1300 or visit the OMAF website: www.ontario.ca/omaf and/or the MRA website: www.ontario.ca/mra
Buying horse hay when supplies get tight
Many horse owners are finding it increasingly challenging to find and purchase suitable hay at previous price points. Low hay yields due to dry weather in 2012 were followed by poorer quality as a result of rainy haying weather in 2013. However, there are also long term economic factors in play that are limiting hay production. Tighter supplies of quality horse hay may be the new reality of the future. Horse owners need to become astute hay buyers, develop good business relationships with hay producers and dealers, learn how to manage large bales on their farm, and minimize hay storage and feeding losses.
Weather and agronomic problems
Hay production was challenging in 2012, with low yields and tight forage inventories. Yields were frequently reported at 50 to 75 per cent of normal. Other factors that reduced yields included winterkill and spring frost damage, as well as insect damage from alfalfa weevil, white grubs, armyworm and potato leafhopper. Yields were much better in 2013, but wet weather during first-cut resulted in considerable amounts being rain-damaged or moldy. Following a long hard winter in 2014, spring inventories of quality horse hay are tight again.
Long-term economic trends
Hay will be available, but not necessarily at typical prices. Historically, there have been surpluses of hay and a buyer’s market existed. This kept prices down below the farmer’s actual cost of production. However, economics have changed with the increased world demand and prices for crops such as corn, soybeans and wheat. Farmers have responded by growing less hay and more grain and oilseed crops. With declining beef cow numbers, the market for poorer quality cull hay has also declined. Corn and soybeans also have a more effective risk management from adverse weather, more hedging and marketing options, and assurance of payment by licensed elevators.
Significant reductions in forage acres in Ontario occurred between the 2006 to 11 census years, of 500,000 acres of hay and 250,000 acres of pasture. Export demand for quality hay to the US is strong. Higher prices will be necessary for farmers to make the decision to grow more hay and increase acreage. The days of cheap hay sold at or below the true cost of production are likely over.
Hay production costs
Hay prices are up, but the costs of producing hay, including fertilizer, land, machinery, buildings and labour, are also up. On a “cents per lb.” of hay basis, the price of phosphorus and potassium fertility removed from the soil in hay is equivalent to about 1.5 – 2¢/lb. Land costs can range from 1¢/lb. on land that rents for $60/acre and yields a three-ton crop, up to 4¢/lb. on land that rents for $320/acre for a 4 ton crop. Establishment costs (seeding, weed control, etc.) are typically about 0.5¢/lb. Harvest costs (cutting, raking, baling, handling, etc.) can add up to over 2.5¢/lb., while storage costs can add another 1¢/lb. Adding up these costs can bring the cost of production to over 7 – 10¢/lb. of hay, before any return to risk, management and profit. Quality hay must sell at a premium to compensate for rain-damaged mouldy hay sold at a discounted price. Returns for producing hay must be similar to competing crops otherwise farmers will simply grow those instead.
Coming events:
July 17 – 20: Listowel Fair.
Aug. 8 – 10: Drayton Fair.
Aug. 15: Canadian National Exhibition.
Aug. 23: Grand River Fair and Exhibition. 4-H Dairy Show and Truck and Tractor Pull.
Aug. 22 – 24: Palmerston Fair.
Aug. 30: Mount Forest Fair.
