With a severe drought in Texas and the Midwest producing corn and grains in place of forage, the price of hay is soaring, and Montezuma County producers are feeling the effects on both sides of the bale.
One thing is for certain, ranchers who raise livestock need hay.
While there is an acute shortage of hay grown in other southwestern states like Texas, New Mexico and Arizona, many Colorado producers are pleased with their recent yields.
“It yo-yos up and down,” Don Schwindt said about the local hay market. “But I guess you don’t look a gift horse in the mouth.”
Schwindt says he’s been producing hay in the county for years, and that this has been a good one.
“We need those now and then.”
Hay is a major cash crop in the county, sold as feed for cattle and horses around the region, the country and the world. Local hay producers either market their hay themselves or through a broker, selling to buyers as close as the ranch next door or as far away as Australia.
According to Pleasant View hay producer Brian Wilson, farmers are dealing with an ever-growing global economy.
“It’s a world market these days. There’s hay going to places like Brazil and China,” he said.
Devin Murnin, livestock and grain reporter for the United States Department of Agriculture Agricultural Market Service, says that what little hay there has been in Colorado for this season has mostly sold.
“There’s a huge shortage for this year. That plays a large factor in higher prices,” he said.
“It’s good for the hay guy and tough on the cattle guys,” said Drew Gordenair, president of the Southwestern Livestock Association.
“The drop in hay (production) in Texas was an issue, so a lot of our hay went there,” he said.
KSJD Radio’s Bob Bragg is host of Ag Markets and More, a report airing just before 8 a.m. on agricultural issues across the globe. He has 30 years experience in agriculture research and is a private consultant to farmers. Bragg says the shortage is due to drought, but also because farmers in midwest states are turning to soy bean and corn crops that are fetching higher profits than hay does.
“It’s kind of a perfect storm of climatic events and the demand for grains that lead to less hay,” he said.
This year meteorologists are calling for a La Nina winter in the Southwest, forecasting dry months ahead. If that continues into spring and summer it could spell trouble for Colorado hay farmers. Last year the county saw much heavier precipitation, so many local producers have a small surplus left to sell.
Interim Director of the Montezuma County Extension Office, Tom Hooten, is the go-to source for information on everything from 4-H to agriculture, horticulture, educational programs and more. He said that there is good hay that comes out of the county and when other states have a shortage, the demand is substantial.
“Forage is one of the county’s biggest agricultural money makers, second to cattle. A lot has already sold, but you see trucks still going out, and the prices have been very good,” Hooten said.
Wilson and other producers are still busy this winter, loading trucks that go in every direction. He said the hours are long, and year round.
“A 40-hour week is a vacation,” Wilson said.
“It’s a 365 day a year job,” Schwindt said.
Hay has varied quality levels
Depending on the quality of the hay, which is measured by things like its protein content, the going rate can vary. Hay, as Hooten explained, is tested for a “relative feed value,” or the nutritional content that determines its quality. Hays with a higher RFV will get a higher price. He said that times are so tough in other western states that he gets calls from ranchers that will take just about anything.
“Some hays will have certain qualities that need to be met, and that’s something that is determined by the buyer,” Hooten said. “The markets differ with quality.”
Hooten said that the county is as diverse as it is fortunate. “Some of the higher quality stuff even goes to the horse ranches in Kentucky.”
Hay is a generic term for several kinds of forage. In general there is alfalfa hay, grass hay, alfalfa grass mixes and then different kinds of grasses in the mix as well.
Since hay prices are market driven, and that market is worldwide, the advantage would seem to be with the producers and not the buyers, but that doesn’t always add up.
Gordenair, part cattleman, part hay farmer, says the costs of producing hay can offset the benefits. “Even though the prices might be high, so is the cost of fertilizer and fuel, so sometimes the net profits are not that great,” he said.
Wilson added that there are only a few manufacturers of fertilizer, and that their prices spike when hay is in demand.
“They’re taking advantage of the situation and we’re using thousands of gallons of fuel, too. It’s not like filling up your car,” Wilson said.
So far in January, prices for hay are inflated, nearly double as this time last year, according to Murnin. Meanwhile, local producers are eyeing high temperatures and low precipitation.
“We’re always at the mercy of Mother Nature,” Wilson said.
As volatile as the market can be, farmers stay in the business through good and bad, but it’s never easy.
“It takes a lot. You have to be an accountant, tax manager, a welder, and then a farmer. There’s a huge resource that you have to draw on to survive,” Wilson said.
After graduating college in 1985, Wilson got an office job. “I sat at a desk for a while. Farming isn’t as bad.” Reach Brandon Mathis at email@example.com