Hay producers are taking a hit as high hay supply, low oil and milk prices, and low demand from dairy farmers have combined to lower hay prices.
According to data from the Colorado Department of Agriculture premium alfalfa is going for $308 per ton, or $10 per bale, and certified-weed free grass is going for $215 per ton, or $7 per bale.
The Colorado Weekly Hay report for Sept. 3 stated that market activity on all classes of hay remained slow on light demand. Alfalfa traded steady compared with the previous week, the report said, with most of the trade activity on hay with a 150 or less relative feed value.
Several factors are driving prices lower. Dairies, which are grappling with decreased demand for milk, need less hay for dairy cows. And lingering West Coast shipyard strikes have caused inventory to back up; and a stronger U.S. dollar makes domestically produced products more expensive to export.
Danny Decker, owner of Decker Hay Farms in Cortez, estimates that current hay prices are down at least 50 percent from this time last year.
Decker says there is an especially high amount of lower-quality grass on the market that isn’t moving at all.
Additionally, demand from dairy farmers for higher-quality alfalfa has significantly decreased this year, but he suspects that dairy farmers are waiting for prices to bottom out before making big purchases.
Decker’s farm produces mostly high-grade hay, but it does sell lower-quality hay that has been moving well this summer.
“My good quality hay is still moving steadily – it might be as much as last year, and it’s moving for less money. There are a lot of factors that go into the prices. It’s tough right now.”