Waving fields of hay will soon spring up around the outskirts of Lexington, marking the start of a new growing season for one of the state’s agricultural commodities. Hay is the third largest crop in the United States, and Kentucky’s production of the crop is an important part of the state’s agricultural life cycle.
Aside from being a commodity itself, hay is central to the feeding programs on cattle and horse farms across the state, particularly as pasture grass disappears through the fall and winter months.
Initial forecasts for hay last summer predicted high winter prices and low availability due to the drought that crippled a large part of the country. Fall rains saved Kentucky farmers, boosting harvests enough that a shortage wasn’t a major concern this winter. Last year’s drought was unusual in that it wasn’t limited to a handful of states, which is typically the case and allows producers in other parts of the country to make up the availability gap.
Like most farmers, hay growers are at the mercy of the weather — not only to provide enough moisture for the hay to grow, but for enough of a break in the rain that hay can be cut and plant moisture allowed to dry before it is baled.
According to Tom Keene, agronomy specialist at the University of Kentucky’s College of Agriculture, the prices of corn and soybeans influence the price of hay also. As the demand for biofuels goes up, farmers have to make a decision on whether to keep planting their acreage with hay or switch to a more profitable crop, and those prices keep rising.
Fortunately, Keene doesn’t anticipate that those prices will be enough to cause a hay shortage in the coming years.
“I’ve never seen a year where there wasn’t enough hay produced in this country to feed the livestock in this country,” he said. “We’re doing so many things better than we used to; we’re getting higher yields on our corn and soybean production as well as hay.”
Munfordville hay producer Clayton Geralds said that those rising corn and soybean prices also allow manufacturers of chemicals and fertilizers to raise their prices, which places pressure on hay farmers, too.
“In my opinion, fertilizer companies are pricing their fertilizer based on what they can for it,” he said. “And also, the price of land has gone up, so a lot of our input costs are based on the price of somebody else’s product and not our product.”
Geralds sells 90 percent of his hay in central Kentucky but also ships some to Georgia and Florida. Some Kentucky hay is sold out of state, and possibly even out of the country. The United States exports hundreds of thousands of tons of the forage across the world each year.
Most of the hay produced in the state is sold via another end product, such as beef or milk. According to Geralds, the natural and economic factors driving his pricing schedule for his nutrient-rich alfalfa hay also influence prices consumers see at the grocery store. Alfalfa is commonly fed to diary cattle to nourish milk production, and farmers have to pass their costs, including grain and hay, on to the consumer.
“If my input costs go up 10 percent, I’ve got to recover that somewhere, [and] the end users have to get more out of their product to keep up,” he said.
In the end, hay economics is more of an art than a science, according to Geralds. While corn and soybean prices remain the same for the products regardless of the location or conditions in which they are grown, hay prices can vary widely. The variety of the plants used, the amount of weeds allowed in the field, and the amount of water the plants receive can be the difference between $2 and $10 for a 50-pound rectangular bale of the crunchy stuff.
Customers are discerning, too. Cattle, with their four stomach chambers, can break down tougher plant material easier than horses and are often viewed differently by their managers than horses.
“Cattle are purely livestock … horses are more like pets,” said Keene. “My pet’s going to get the best that it can get. I’ll pay that extra money, because my horse is one of the family.”
In addition to requiring higher quality than cattle farmers, horse owners are also more inclined to purchase smaller square bales, which can be easily separated into portions, than large round bales, which typically weigh anywhere from 1,000 to 2,000 pounds.
“You get paid for what you do. You get paid for quality. If you’re the kind of person who wants to do a real good job, pay attention to detail and do everything right, in the hay business you can get paid for that extra work. In the corn and soybean business, you basically don’t.”
For now, it’s too early for experts to say what the hay forecast looks like for the year. Farmers like Geralds will be establishing prices for baling twine and estimating yields for the next six weeks, but he reports that he doesn’t anticipate any drastic changes from last year’s prices.