Manitoba hay production could end up being much lower than last year, and the resulting higher prices are likely to inflict even more pain on the province’s cattle producers.
Hay jumped from 2.5 cents per pound in 2007 to 3.5 cents this spring, and that was for last year’s leftover bales, according to Manitoba Agriculture pasture and grassland specialist Jane Thornton.
Now, with a cool, dry spring and a droughty summer slashing hay yields in the province’s southwest, and a seemingly endless procession of thunderstorms in the central and parkland regions keeping machinery out of the fields, prices could rise even more.
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“It’s going to be a very interesting year,” said Thornton.
“Some of the commercial hay producers I’ve talked to say 3.5 cents a pound is going to be for the bottom of the barrel.”
When hay prices are high, many farmers have traditionally cut costs by feeding straw with supplemental grain.
This year, even that loophole may be closed as expensive fertilizer makes every last scrap of organic matter precious as a source of nutrients for next year’s crop.
“With the amount of nitrogen, phosphorus, potassium and sulfur that’s in your average wheat straw, you’re looking at between $28 and $36 a tonne just for the nutrients,” said Thornton.
“So how many guys are you going to convince to roll that straw up?”
She added that unless terrible weather at harvest time downgrades a good portion of the province’s grain crops, topping up that straw ration with grain is likely to be far from cheap.
Diesel at $1.40 a litre will push even the price of slough hay higher. Transportation costs, always a big factor in the forage market, have risen about 50 percent since 2006, she said.
“(Slough hay) may be the cheapest hay on the market, but it’s still not going to be as cheap as it was,” said Thornton.
Many alfalfa and tame hay stands have been sprayed out and seeded to grain and oilseed crops with better economic prospects, further reducing the forage available for cattle.
Jim Kaleta, a forage grower from the Dauphin area, took the hint this spring and seeded oats on his 1,000 acres of forage land. It turned out to have been a good decision, because the crop has done well under this summer’s heavy rains, he said.
He estimates that hay production in his area might be down by as much as a third because many hay sellers switched to grain and cattle producers sold off their cow herds.
Of those that were left, many opted to cut back on fertilizer or dispense with it entirely this year, he added.
“A native stand, if you’re willing to take a small yield off it every year, will kind of sustain itself. But tame grass hay, if you don’t put the nitrogen to it one year, after that you won’t hardly get anything,” said Kaleta.
“As for alfalfa, if you’re not putting phosphate, potash and sulfur on there, it just peters out after three years. If you want to keep your stand long term, you’ve got to feed it a bit.”
At current nitrogen prices, the cost of fertilizer alone for a hay crop that might yield only two tonnes per acre if the rains don’t come would be $60 to $80.
“It costs a lot of money to put hay up, with the cutting and baling, too,” he said.
Production in the parkland has also faltered because of the extremely wet conditions, with up to 380 millimetres of rain falling to date.
“There was a week there at the end of June that was good, when guys got some nice hay put up. But lots of stuff hasn’t even had a first cut yet,” he said, adding that some fields are so wet that even silaging equipment can’t get on them.
“There’s going to be some serious shortages of hay, I would think, and I don’t think there’s much cash flow in the industry that can pay much for hay to start with.”
Glenn Friesen, a forage specialist with Manitoba Agriculture, said the price of dairy and horse quality hay for export has soared 70 percent above the five-year average due to drought in Spain and Australia and reduced acres in the United States.
Large square alfalfa bales suitable for dairy production are bringing $200 a short ton, and horse quality grass hay is worth $180 per short ton, he said, adding that buyers in many cases are willing to pick up the cost of freight as well.
“There’s such a demand that they’re able to do that. I don’t know how long it’s going to last but I suspect at least until commodity prices calm down,” said Friesen.
Darren Chapman, a forage producer near Virden, Man., said that yields on his 1,500 acres this year are looking good, but recent rains have stalled production.
“We’re getting enough hay for our regular customers, but we haven’t got an abundance to sell,” he said, adding that a good portion of their production will go to feed the family’s 600 head of cattle.
Of the two costliest inputs for hay production, fertilizer is the scariest.
“Fertilizer is leapfrogging fuel. It’s just going out of this world,” said Chapman, adding that potash has leapt about $400 per tonne since spring.
Pure alfalfa stands may fix their own nitrogen, but cropping it for hay removes a lot of other nutrients.
On his farm’s lighter soils, he applies 350 lb. of a granular fertilizer blend consisting of potash, sulfur and phosphate after every two cuts, he said.
So far they haven’t been able to pass on much of their higher costs to their customers who are mainly Saskatchewan horse and dairy producers. Chapman is selling hay for $130 to $150 per tonne.
