Two years of drought have had a major impact on hay production, according to the recently released Dec. 1 hay stocks from the USDA.
Stocks were expected to tighten, as 2022 hay production was 112.8 million metric tons and the smallest production since 1959. The USDA report, however, showed total U.S. hay stocks of 71.9 million tons, down 9% from Dec. 1, 2021, which is the lowest Dec. 1 stocks since 1954.
CattleFax analyst Troy Bockelmann wrote in a report, “Yield was 5 percent below the previous five-year average. The biggest impact was felt in the southern Plains as stocks were reduced by 30 percent from a year ago. The Southeast also had a 12 percent decrease in stocks, while the northern Plains and Northwest posted increased stocks."
The 2022 hay prices were reflective of tighter stocks, averaging above $220 per ton – a nearly 25% increase from a year ago. Bockelmann also noted that prices seasonally tend to increase into May, until the new hay season begins.
Derrell Peel, livestock marketing specialist at Oklahoma State University, also suggested in a report that tight hay stocks could mean additional liquidation for the cattle industry this winter.
Peel said, “[The beef industry] is particularly vulnerable to severe winter weather in the next couple of months. The December storm has already taken a chunk out of the reported December 1 hay stocks. New forage production is several months away in the South and even further away in Northern regions."
CattleFax expects prices to remain elevated into the spring, with a U.S. all-hay average price likely supported above $230 per ton. Spring precipitation could increase 2023 production, but with severely depleted stocks, prices will likely remain elevated throughout the year. Bockelmann said hay prices for 2023 will average closer to $200 per ton and could ease up in the second half of the year.
