– Dr. Kenny Burdine, Extension Professor, Livestock Marketing, University of Kentucky
As we prepare to turn the page on January, most cow-calf operations are well into their winter feeding programs. High fertilizer prices in the spring of 2022 likely resulted in less fertilizer being applied to hay ground. This was combined with a lack of rainfall in much of the US to result in a sizeable decrease in hay production for the year. Drought conditions also forced many cattle operations to begin feeding hay earlier than usual. All these factors together resulted in a 9% decrease in December 1 hay stocks for the year at the national level. James talked through much of these hay production and stock numbers two weeks ago and that article can be found here.
Tight hay stocks were seen across many areas of the US, including the three states that James, Josh, and I call home. In Arkansas, Kentucky, and Mississippi, December 1 hay stocks were down 15%, 17%, and 20% respectively. Of course, tight hay supplies result in higher hay prices, which increases winter feed costs for cow-calf operations. There is limited price data on the type of hay that is typically fed to cows, but USDA’s national hay price estimates can be seen above. Due to transportation costs, hay markets tend to be very regional and large differences can exist across relatively small distances. So, don’t focus too much on the nominal price levels in the chart above; instead notice the increase in hay prices throughout 2022. In the Other Hay category, prices rose by 28% from April to November (December prices were not yet available).
Winter feed is the probably the largest expense for most cow-calf operators and I wanted to put this in perspective for a typical operation. Often, grass hay can be purchased for $60-$80 per ton. Based on what I am hearing this winter, that same quality hay is selling for something closer to $100-$120 per ton. The table below uses this hay value range to estimate daily hay costs for a 1,300 lb cow consuming 2.25% of her body weight per day. It also looks at loss rates of 15%, 25%, and 35%.
Higher hay prices this winter have likely resulted in a 25%-50% increase in daily winter feed costs per cow. And it is also likely that producers will feed hay for more days this winter too. The other point to be made from the table below speaks to the importance of limiting storage and feeding losses. While efficient hay feeding is always important, it becomes more important as hay becomes more expensive. The more expensive hay is, the greater the loss from hay that is purchased (or produced) and not utilized by the cow herd.
