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Dr. Curt Lacy Extension Economist-Livestock. Hay Production Economics and Outlook. This morning’s map. Current situation Inputs Outlook for 2011. Hay prices have rallied some in recent months. Alfalfa hay prices are stronger also. Livestock Marketing Information Center

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Dr curt lacy extension economist livestock l.jpg

Dr. Curt Lacy

Extension Economist-Livestock

Hay Production Economics and Outlook


This morning s map l.jpg
This morning’s map

  • Current situation

  • Inputs

  • Outlook for 2011



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Alfalfa hay prices are stronger also

Livestock Marketing Information Center

Data Source: USDA-NASS


Outlook l.jpg
Outlook

Input situation and outlook


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Factors at Work

Inputs

Prices Received

Number of hay consuming units.

Economy

Acres of hay

  • Demand for fertilizers

  • Fuel costs

  • Equipment costs


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Input Outlook for 2011 – Fuel

  • Tightening Supplies

  • Increasing demand

  • Political unrest

  • Steady to higher prices for 2011 and 2012



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Fertilizer Factors

  • More corn acres

  • Increasing South American demand

  • Strength of US dollar

  • Price of natural gas

    = Steady to higher fertilizer prices in 2011-2012


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Estimated 2011 Hay Production Costs

Source: University of Georgia


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Outlook

Projected Supply and Demand



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Tighter US stocks led to higher prices this winter

Livestock Marketing Information Center

Data Source: USDA-NASS, Compiled & Analysis by LMIC


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Livestock Marketing Information Center

Data Source: USDA-NASS, Compiled & Analysis by LMIC








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Summary of Livestock Factors long.

  • High beef cattle prices are good for at least two reasons:

    • Suggests herd expansion is coming soon

    • Makes it more economical to feed cows hay

  • Dairy herd continues to consolidate

    • Larger farms tend to be more specialized and willing to contract with local or regional growers.

    • Increasing emphasis on forage-based systems increases demand for hay or baleage.

  • Rapidly expanding goat and sheep market provides another often overlooked target market.


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Hay exports have become more important long.

Livestock Marketing Information Center

Data Source: USDA-FAS, Compiled & Analysis by LMIC


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Livestock Marketing Information Center long.

Data Source: USDA-FAS, Compiled & Analysis by LMIC


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Livestock Marketing Information Center long.

Data Source: USDA-FAS, Compiled & Analysis by LMIC



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US Alfalfa long.Seedings 2008-2010



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Estimated 2011 Hay Production Costs long.

Source: University of Georgia


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Summary long.

  • 2011 could be a very interesting one for hay producers.

  • Tight supplies and an improving economy will likely increase demand.

  • However, higher input prices could reduce costs enough to lower profits.


Dr curt lacy extension economist livestock clacy@uga edu l.jpg

Dr. Curt Lacy long.

Extension Economist-Livestock

[email protected]

Questions?


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