As drought conditions persist for a second consecutive year in the region where the Western Corn Belt meets the High Plains, concerns over forage production and hay supply are growing. The July "Cattle" report by the U.S. Department of Agriculture (USDA) has revealed that the U.S. beef cow herd continues to decline, indicating potential challenges for hay supply and driving prices higher.
Forage production levels are heavily reliant on the amount of moisture an area receives during the growing season. However, rain has been sporadic during the first half of the year, leading to lower hay stocks in some states and increased uncertainty about supply. With hay supply likely to remain short, livestock producers are securing hay earlier than usual, reflecting growing concerns about availability.
Weather uncertainties have fueled apprehensions that the forage supply will again be limited this year. Dry areas in the region have shifted from the west to the east compared to the previous year, resulting in varying levels of moisture. This has led hay buyers to search for hay during a typically lower-demand period in the market. Increased demand for hay is expected as spring calves are weaned and sold to feedlots in the coming months.
The high demand for hay has prompted sellers to bring more loads to the market, especially in areas with better moisture conditions. However, regions facing drought continue to experience reduced hay stocks, potentially leading to further price hikes. Hay prices have been relatively strong in recent sales, although a slight weakening in prices was observed. Nevertheless, long-term hay prices are projected to continue increasing, with higher prices expected in the fall and early winter.
The USDA's May 2023 report on hay stocks indicated a 13.4% decrease compared to the previous year for the U.S. The Northern Plains states saw an increase in hay stocks, while other states experienced significant declines. The drought has caused major production concerns in states like Nebraska and Iowa, leading to lower hay stocks. The variability in moisture levels across Kansas has also affected forage growth and availability.
With forage production levels uncertain due to varying moisture conditions, livestock producers are seeking alternative forage sources to meet their needs. Planting annual forages like sorghum Sudan grass or relying on corn stalk bales after harvest are some strategies being adopted. Producers are advised to plan ahead and purchase hay early, as well as test their forages to understand nutrient levels and potential nitrate toxicity.
Given the ongoing drought and its impact on hay prices and supply, livestock producers are urged to be flexible in their operations and take proactive measures to manage forage costs and secure sufficient hay for their herds.