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Hay Production Economics and Outlook

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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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Presentation Transcript
this morning s map
This morning’s map
  • Current situation
  • Inputs
  • Outlook for 2011
alfalfa hay prices are stronger also
Alfalfa hay prices are stronger also

Livestock Marketing Information Center

Data Source: USDA-NASS

outlook
Outlook

Input situation and outlook

factors at work
Factors at Work

Inputs

Prices Received

Number of hay consuming units.

Economy

Acres of hay

  • Demand for fertilizers
  • Fuel costs
  • Equipment costs
input outlook for 2011 fuel
Input Outlook for 2011 – Fuel
  • Tightening Supplies
  • Increasing demand
  • Political unrest
  • Steady to higher prices for 2011 and 2012
fertilizer factors
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

estimated 2011 hay production costs
Estimated 2011 Hay Production Costs

Source: University of Georgia

outlook11
Outlook

Projected Supply and Demand

tighter us stocks led to higher prices this winter
Tighter US stocks led to higher prices this winter

Livestock Marketing Information Center

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

slide14

Livestock Marketing Information Center

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

summary of livestock factors
Summary of Livestock Factors
  • 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.
hay exports have become more important
Hay exports have become more important

Livestock Marketing Information Center

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

slide23

Livestock Marketing Information Center

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

slide24

Livestock Marketing Information Center

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

estimated 2011 hay production costs28
Estimated 2011 Hay Production Costs

Source: University of Georgia

summary
Summary
  • 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
Dr. Curt Lacy

Extension Economist-Livestock

[email protected]

Questions?

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