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The Case of the Missing Hay Buyer

hay sales market prices

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#1 haygrl59

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Posted 20 February 2017 - 03:39 PM

Our hay business is located in the Midwest and as most know, we have had an unusually mild winter, at least up to this date. Our hay sales have been really down and especially with our small squares. I have had customers come and get a few bales and then tell me that they are putting their animals back on the pastures. I don't see how that is going to be good on those pastures come spring and into summer. If we have a drought, as some forecasters are predicting, they are going to be crying for hay sooner than later. Other producers are also stating that their sales are flat. The big question we have is, where are they getting their hay? Are the buyers feeding alternative feeds for their animals? Did a lot of folks just get rid of their livestock? Its almost like a mystery--the case of the missing hay buyer. The hay auctions and craigslist also reflect this downward trend in hay prices as well. I am sure some producers may just throw in the towel this year because there isn't much profit in hay these days. Perhaps this is a trend in the Midwest and not other places. Inquiring minds want to know....



#2 ozarkian

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Posted 20 February 2017 - 04:12 PM

Same here in Southwest Missouri. the weather has been so warm in January and February, my regular customers have really slowed their buying.

Money is still tight for most animal owners and there has been so much hay available for the last 2 years, most buyers around here are buying on price, not quality and service. Fortunately I sold most of my inventory in late summer and early fall. There is a lot of junkie hay (weed bales) around here and that always hurts me trying to sell quality hay.

 

The reality is that a drought always improves my bottom line.


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#3 hillside hay

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Posted 20 February 2017 - 04:41 PM

Steep downward slope here. Have a couple of new customers but not enough. No o e complains about a 60lb bale this year though. Will have 1500 carryover at this pace. That hurts because those 1500 bales are the majority of the maintenance budget.
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#4 RuttedField

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Posted 20 February 2017 - 04:51 PM

On my farm the "case of the missing hay buyer" has nothing to do with the people buying hay, but the animals consuming it. I might be way off based here, and this is merely my experience based 100% in Maine...so endure this with me as I continue...

 

I have sheep and their preferred temperature is 28 degrees, just like you and I prefer 70 degrees, this is where they are comfortable. Today the temperature is at 37 degrees, well above their "perfect range" so they just don't eat as much hay. They don't need to, unlike when it dips down below 20 degrees. When that happens, to keep their little furnaces going, also know as their stomachs (rumens), they eat a lot of hay. When it dips down to -10 below 0 (f), oh my they REALLY eat some hay.

 

In the perfect world I would feed according to the predicted weather for the day, but honestly they just do a really good job. As an example, last summer we had a huge drought, grass was half the growth we typically get, and so I was so-so on having enough hay to go the winter. (My second crop hay was stolen because hay was in such high demand, but I digress). Then we go into December and it is pretty cold and my hay levels plummet and I wonder if I will have enough, but then January gets mild and I have a lot more breathing room. Now February is rather mild too, so I know I will have enough. Now none of this is based on how much I fed out, its based on how much is left in the managers when we go to feed up again the next day.

 

But if it was super cold all winter this year, oh yeah, I would have been screwed as far as having enough hay.

 

I could be wrong, but its probably the animals that your hay is intended for that is invisibly causing the low demand in your hay market.


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#5 Lostin55

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Posted 20 February 2017 - 04:58 PM

If you have hay left over at 1st cutting, your prices were to high. If you sold out before the season was over, your prices are to low.

There is cheap hay and there is good hay. I don't think that good hay can be had cheap. Around our area much of the hay is shipped out. The local buyers all want it as cheap as they can get it. In my area, I can ship it in from 2 states away for cheaper than I could buy it, which is still underpriced. Fortunately I am not a hay broker and have no interest.


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#6 VA Haymaker

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Posted 20 February 2017 - 05:28 PM

We're essentially sold out (small squares). Got a few decent bales left among a few more goat bales of hay that would need picked out of the pile. However, what I look at, when out and about, is the number of round bales left in a stack outdoors (lots of round bales around here stacked outside, in pyramids and tarped - until the tarp rips and/or blows off again)..... :)

If the number of round bales left is any indicator of hay inventory, there is a lot of left over hay yet to be consumed.

I've also been reading comments here and there speculating the potential for drought. Here it is very dry and has been several weeks since a soaking rain. Pretty much no snow.

OTOH - when I see pastures and paddocks, they are eaten down/over grazed IMHO.

I think the surplus of hay in our area has more to do with the shear volume of hay put up last summer than a warmer than a average winter - which we've had.

BTW - when I read the topic title, "The Case of the Missing Hay Buyer", I thought this is going to be a rant about the customer that absolutely, without fail will be there to buy hay on a given day/time and is a hopeless no-show, no call to let you know they are a no-show and a never hear from again the jack-arse..... ;)

YMMV

Bill
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#7 Farmerbrown2

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Posted 20 February 2017 - 05:44 PM

The hay market sucks here I had the day off today because of the holiday so I took a pickup load to the auction. Second cut grass hay got $270 bucks it was okay price but could have been better. The part that sucked was I had a trailer load of 1st cut Timothy that got a little to much sun and was bleached off only got $100 a ton. There is to much hay around not enough animals and on top of that the weather has been to warm . I heard a couple guys talking about spraying or plowing a lot of hayfields we can only hope they do . Also heard last week a guy had 2nd cut grass with a little dust at one of the auctions and got whopping $15 a ton .
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#8 Northeast PA hay and beef

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Posted 20 February 2017 - 06:46 PM

We've been able to get rid of most of ours, but it mainly goes to the horse tracks. One of our minor customers feeds 200 sheep. They have only taken about half what they normally do. So about a thousand less than normal, but our main buyer will take the extra. We will have some extra round bales, our cattle have been eating less than normal with it hitting 63 degrees in February. We'll just be holding over those stacked inside for next year. Lot easier to buy some extra cows, than find buyers for round bales.
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#9 Vol

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Posted 20 February 2017 - 08:13 PM

Due to extreme drought, my summer hay yields were off 40% after a stellar first cutting.....it really saved my production. I still got a very nice average price per ton, but I did not sell out completely until last week. 

 

I guess what I am saying is that I think hay demand is off here too, but it was well disguised by the drought. 

 

Things that I have noticed here:

 

Folks are feeding cheaper round bales here when possible as compared to not doing so before.

 

There are noticeably less horses here than 5 years ago. 

 

I think many folks are struggling just about as hard now financially as they were five years ago.....there are signs the economy wants to get better(commercial and residential construction starts), but it still seems to be a 2 steps forward one back type progress. Folks are being savaged by health insurance costs and the high costs of production in most of the products that they consume.

 

We are entering a 9th consecutive year of financial woe of some kind or another. I don't even know what to call it nor do I think any of the economic gurus really have a answer for it or really understand what is going on.

 

Regards, Mike


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#10 FarmerCline

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Posted 20 February 2017 - 08:36 PM

The demand for small squares here has been down this year compared to the past two years.....can't comment on rounds as I only makes small squares. It really surprised me with the extreme drought we had last summer and fall......I figured the demand for hay and hay sales would be very strong this winter but it has been mediocre at best.

My commercial accounts have been buying a little less hay than they normally do but retail hay sales have been considerably less than normal. I dont produce enough grass hay to meet the needs of my retail hay business so I always end up buying some to keep a constant supply but it looks like I'm going to have some alfalfa left over......kind of wish I would have advertised it to see if I could have picked up another commercial hay customer. I didn't advertised any hay this year because I figured I wouldn't have enough to meet the demand of my retail business.
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#11 Circle MC Farms LLC

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Posted 20 February 2017 - 09:20 PM

All round bales here but sold out in October which is right at the end of our normal season and I was pretty happy with how that went. Demand is slow now though, and greenup is beginning here in Texas.



#12 Widairy

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Posted 20 February 2017 - 10:12 PM

From what I can see around here hay in general is selling only at rock bottom if it sells at all. Having said that I am not in the business of selling hay, just talking to the neighbor who sells small and big bales, watching the market reports, and seeing every other fence row with a row or two of rounds lined up next to it. I know the neighbor hasn't sold any of his large squares from last summer and figured he has enough carryover of small squares to not have to make any this year.

I think for big bales the cattle markets being in the tank holds the price down to a point. And there is not a lot of pressure on the supply side with low corn and bean prices not a lot of hay acres being shifted. Just my observation looking at stuff trying to figure which way to zig or zag in the diversification from being strictly dairy.
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#13 IH 1586

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Posted 21 February 2017 - 07:05 AM

I guess for me it is the opposite. I have seen an up tick here in sales, then again it is my first year of having inventory last this long. One of my new customers commented on how much nicer my round bales are compared with his other supplier even though he is paying more for mine. Quality is worth it just have to convince them to look. But my gains from customers will translate into purchases out of field so eventually the winter sales will take a hit.

 

Like leeave96 I thought the same thing about the title. On Sat I was the case of the missing hay seller. Took a load of hay to a customer and followed his directions. Wife and I sat at the end of the road looking at the hill in front of us and said this is stupid. 1/4 the way up truck lost traction slid back down a little and jack-knifed the trailer. 2 hours later after wrecker winched us up the hill several times, we followed him back to pavement took load back home, almost didn't make it through the mud where the roads were falling apart. Taking it over this morning.

 

It is amish so could not call and he never called to see why we did not show up. Went over yesterday and met with him and he did give us wrong directions. We never would have made it up his hill either.


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#14 Vol

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Posted 21 February 2017 - 07:09 AM

I suppose we were forewarned since the 2015 carryover in hay stocks was the highest in several years....and then the expansion of acres hayed increased by almost 2 million acres in 2016 due to the very weak grain market. And now a very mild winter for most of the US means even more carryover. I wish I had some horse statistics, but I believe many equine have made the trip South of the border in the last 5 years and have been processed. 

 

I do not know enough about the Dairy industry to say this way or that, but from the way it sounds on HT they have also cut back and many are putting up wrapped hay which saves them time and has cut down on the "lost" dry hay due to element damage.

 

I think this will be a belt tightening year in the dry hay industry.

 

Regards, Mike


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#15 mlappin

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Posted 21 February 2017 - 08:21 AM

Have really noticed the price has dropped  a lot at the auctions in the last month, last Saturday I brought it home rather than practically give it away. Demand is there if you don’t mind losing money. 

The mild winter is definitely not helping, and I’ve seen a lot of critters on pasture already, even if it doesn’t turn out dry still not doing those pastures any favors at all, we won’t turn the cows out till we have at least 10-12 inches of new growth.



#16 Lostin55

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Posted 21 February 2017 - 08:34 AM

With the current lower beef prices, and the economy being what it is, I have seen folks looking for alternative methods to feed their stock. I have seen them buying lower quality feed, using distillers grains, beet pulp, adding straw to the ration etc. This is in addition to the percentages normally used. Costs are being reduced any way possible in an effort to realize a profit.
Let's not forget that Betty Mcmansion with her horses out back may have reduced disposable income.
All of this leads to lower hay prices and higher inventory levels.
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#17 haygrl59

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Posted 21 February 2017 - 09:27 AM

We had over 1200 big rounds and fortunately, we have sold almost all of them (still have about 100 left) but we sold them at a loss just to get them out. The barn has approximately 4400 small squares left and those sales are moving pretty slow. We usually have several semi loads going out to horse farms this time of the year but we have not heard from our regular large buyers yet. It is probably several dynamics affecting the hay market as others have pointed out: the economy, higher inventories, mild weather and the like.

Being in the hay business isn't for the weak.


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#18 Tim/South

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Posted 21 February 2017 - 10:07 AM

The numbers of cattle at the local sale barns was high this winter. Hay yields were low, people fed hay all summer and local hay was impossible to find. The drought prevented planting winter grazing. Hay costs went through the roof and anyone thinking about selling out, did.

 

A friend sold out of cattle and let me buy 100 rolls at a very reasonable price. 

Not real sure why I am hanging on.



#19 Vol

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Posted 21 February 2017 - 03:31 PM

Not real sure why I am hanging on.

 

When you love what you are doing, it is much harder to let go.....and you have held tight to this point, what is a while longer going to hurt? It seems that beef corners frequently turn very sharply, so a decent upturn could be at hand. It is just a guessing game in ag.

 

Regards, Mike


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#20 Waterway64

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Posted 21 February 2017 - 10:33 PM

We are in a drought area here. I sold all hay I thought I could spare out of the field. Now we have a very cold winter and I am afraid I will be buying back a couple loads. We have had a huge number of cattle sold out of this region. It is still dry but with all the cattle that are gone I am not sure what the market holds for 2017.





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