Hay trucks are rolling across the Prairies, carrying their valuable cargo to hungry cattle in western Saskatchewan, Alberta and Montana.
And the farmers lucky enough to have grown that hay are benefitting from the strong demand.
“We’re absolutely having a good year,” said Eric Boot, who grows irrigated hay at his farm near Fort Macleod, Alta., and on land he owns at Outlook, Sask.
The local and export markets, cattle producers and processors, are paying premium prices for good quality hay.
Barry Marquette, who grows dryland hay near Kelvington, Sask., is selling square bales to Saskatoon area dairy farms for $3.50 to $4.50 apiece, about twice as much as last year.
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The bad news is that with drought-shriveled yields well under a ton an acre, he doesn’t have all that much to sell.
“I guess if you’re getting one-third the normal tonnage, you’re not really farther ahead even if you double your price,” he said during a break from harvest.
Greg Sommerfeld, president of Elcan Forage Inc., of Outlook, said the dryland hay crop in central Saskatchewan is the worst he’s ever seen, and that’s being reflected in the marketplace.
“We’re having to pay more than we’ve ever paid for product,” he said.
Over the last five years he has paid an average of around $80 a ton for top grade alfalfa, but as of last week he was looking at prices of $110 to $115 a ton.
“I suspect it will just go up as the year goes along.”
Boot said he’s seen premium quality hay fetching as much as $130 to $150 a ton in the local market and more than $200 on the export side.
“Export hay is probably the highest price we’ve ever seen,” he said, adding there’s no problem finding customers. “We’re not having to put out any ads. We have people calling us.”
Phil Curry, who tracks hay markets for the Saskatchewan Forage Council, said prices are being driven by the combination of reduced first-cut yields and strong demand from southern Alberta and Montana.
“It’s been a very good market,” he said. “Prices weren’t bad last year but they’re even better this year, and the quality is generally not bad.”
Many Alberta livestock producers, concerned about the threat of drought, locked up 2001 hay from Saskatchewan this past spring. That, combined with the drought, has resulted in tight supplies in many areas of Saskatchewan.
In general terms, hay output is poor in central, western and southern Saskatchewan, and central and southern Alberta, but good in northern and eastern Saskatchewan and Manitoba.
In an Aug. 5 market report, Curry quoted the following prices for hay delivered to Lethbridge: greenfeed $100 to $110 a ton; grass hay $115 to $145; grass-alfalfa or alfalfa hay $130 to $145; good quality dairy hay $160.
Hay delivered to Montana fetches even more thanks to a subsidy paid to cattle producers estimated around $40 Cdn a ton. Alfalfa acreage south of the border has dropped significantly due to lucrative support payments on crops like corn, boosting American demand for Canadian hay.
Bob Adamson of Transfeeder Inc., of Olds, Alta., a company that exports forages and timothy to Japan, South Korea and the United States, said it will be a challenge to meet the demand this year.
“We sell an awful lot down to the States and we’re having trouble getting the supply we need.”
He said the export market will eventually get all the supplies it needs, relying heavily on irrigated production, but the domestic market could run short.
Sommerfeld said his company, which processes alfalfa and timothy for the export market, normally gets 40 percent of its supplies from local growers and goes as far afield as 300 kilometres for the rest.
This year, with local dryland yields ranging from zero to half a ton an acre, compared with normal yields of 1.5 to 1.75 tons, that won’t be the case.
“We’re into Manitoba already, which is not good for this time of year,” he said, adding much of the local irrigated hay is going to Alberta or Montana. “It’s tough to compete against the U.S. dollar.”
Curry said this year’s developments illustrate the changing nature of the market for hay and forages.
Typically, good hay producers would develop their own network of customers, relying on personal contacts and playing their cards close to their chests.
Now, more farmers are growing hay and buyers and brokers are securing their supplies in advance through more open marketing channels.
“It’s been a fairly secretive business, a very personalized industry,” said Curry. “But it’s not so informal anymore. A lot of farmers are looking at hay as their main business.”
