Hay prices causing issues for stockgrowers
BUFFALO — Consistently worsening drought and skyrocketing hay prices in Wyoming are causing issues for livestock owners’ pocketbooks and their ability to sustain full herds.
"I'm hearing people who are saying, 'We just aren't going to have the grass out there
to keep our livestock out on the range, and if we bring them in sooner, we'll be feeding hay and we're anticipating high prices,'" said Jim Magagna, executive vice president of the Wyoming Stock Growers Association. “'I'm still debating, do I step out now and buy a little hay or do I just sell off more cattle.' That’s the dilemma.”
The high hay prices, which started in the county during last summer's drought,
have continued this year, according to Jason Watts, owner of local hay brokerage HayWerks.
This is, in part, because the continued drought in the county this summer has made it nearly impossible to make up for the lost supply.
The most current U.S. Drought Monitor shows that all of Johnson County is in at least moderate drought, with the middle third of the county — north to south — in severe drought and the eastern third of the county — north to south — in extreme drought.
Hay yield is expected to be low, and producers will likely have to give supplemental feed to their livestock when conditions are considered moderate drought or worse, according to the monitor.
And, with that continued drought, hay prices have increased significantly, Watts said, in some cases as much as 85 to 105 percent for the first cutting.
According to a late June price release from the U.S. Department of Agriculture, Wyoming alfalfa prices are up to $180 per ton — an increase of $5 over last May — while other hay is also at $180 per ton — an increase of $45 over last May.
And Watts expects those prices will continue to increase for the second cutting.
"The growers and the farmers we’ve bought hay from on the first cutting, they've all requested that we rebid their second cutting, second crop, and … their intentions are to raise their prices on the second cutting,” Watts said.
While drought has played a big role in the increased prices, Watts said there are a multitude of other reasons that hay prices have increased, including recent rains damaging as much as 30 to 40 percent of the hay that was down in the Bighorn basin. On the other side of the Bighorn Mountains, as much as 45 percent of the already cut hay was damaged.
In addition, Watts said, cattle feed yards have started purchasing larger quantities of hay, and they are willing to pay premium prices to get the amount of crop they need.
“Whatever inventory was left out there is going to those great big feed yards first, driving the prices higher, and it's kind of a domino effect,” he said. “So, the very large buyers are getting first preference on the hay and they're paying for it. And then … some of your smaller ranchers, smaller producers are just kind of picking up the crumbs.”
But the biggest issue driving prices, Watts and Magagna said, is the distances that hay has to be shipped around the state.
Watts said he is already bringing in hay from as far as 400 miles, and Magagna said these distances are increasing prices because of the lingering coronavirus issues in the trucking industry.
"The other factor, when you're bringing in hay, is that trucking is an issue,” Magagna said. “(With) the demand and lack of truck drivers and everything, freight is higher as well. So hay in Wyoming is no doubt going to be very high. It's going to be almost for sure higher priced, and if you have to bring hay in from other areas, then the freight becomes an issue.”
The increased hay prices are already affecting the pocketbooks of stockgrowers in the county and the state, which may ultimately affect whether stockgrowers are able to maintain their herds.
Magagna said the impacts are slightly less for those producers who pasture cattle for the summer before selling them to feed lots, because some of those producers were able to make the determination early this season not to move as many animals as they normally would to pasture.
But those who run cow-calf operations may not be so lucky.
“They now have pairs of cows and calves they don't have enough forage for," he said. "And I am hearing reports of 'I sent a load to the auction market of my cows and calves' and I've been hearing a couple people say, 'I may have to sell off everything.' It's not widespread, but it certainly is happening.”
And it appears to be happening in Buffalo, too, as Buffalo Livestock Auction owner Danny Matney said his auctions have been busy and they've been seeing livestock coming in earlier than they typically would.
"I think everybody's kind of in a panic mode right now," he said. "I think it’s awful early yet, you know. Most of the farmers and ranchers around here haven't even gotten their hay up yet, if they’re going to have any.”
Matney said the good news is that so far prices are remaining solid. However, he thinks ranchers are likely selling now to try to get out ahead of any feeding issues.
"We're seeing some stuff right now and there's some people definitely just kind of making sure there's no extra mouths around to feed,” he said.
With hay prices expected to continue to increase throughout the summer, Watts said, out-of-state competition that is already playing a factor will need to be monitored.
So far, southeast Montana and southwest North Dakota are reaching out the most for hay, he said, and it is almost entirely first-time buyers.
But the supply just isn't there to meet the demand generated by the 50 to 75 messages he's receiving every single day, and he's even had to pause sales online because growers are still baling their hay and he isn't getting it fast enough. Watts said that he'll keep prices down as much as he can, because he understands the effect this will have on stock producers in the county.
"It's really, really hurting these folks from a financial perspective,” he said. “I just want them to understand that it's a bigger picture than Johnson County right now. This thing's in a multi-state area that's really pulling on the pocketbooks pretty hard.”