Dr. Curt LacyExtension Economist‐Livestock

Dr. Curt LacyExtension Economist‐Livestock

Current situation Inputs Outlook for 2011

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$/to

n

Good Quality Bermuda Hay Prices ($/ton), 4x5 RollSoutheastern Weekly Prices, 2005-2011

105

110

115

120

125

130

135

MAY JUL SEP NOV JAN MAR

$ Per Ton

ALFALFA  HAY  ‐ MONTHLY  AVERAGE  PRICEReceived by Farmers, U.S., Crop Year

Avg.04/05-08/09

2009/10

2010/11

G P 12t k M k ti I f ti C t

Input situation and outlook

NPUTS

Demand for fertilizersFuel costsEquipment costs

PRICES RECEIVED

Number of hay consuming units.

Economy Acres of hay

.00

.00

.00

.00

.00

.00

Spot Diesel Price ($/gal), US Gulf Coast

June 2006‐March 2011

Spot Diesel Price, US Gulf Coast

• Tightening Supplies• Increasing demand• Political unrest• Steady to higher

prices for 2011 and 2012

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Nitrogen (AN) Phosphorous (DAP) Potash (Muriate)

More corn acres Increasing South American demand

Strength of US dollar Price of natural gas= Steady to higher ertilizer prices in 2011‐2012

 $‐

 $100.00

 $200.00

 $300.00

 $400.00

 $500.00

 $600.00

 $700.00

Alfalfa Hybrid Bermuda Mixed Hay

$/ac

re

Projected Supply and Demand

5,500 to 10,800 (9)3,800 to 5,500 (6)2,500 to 3,800 (8)1,800 to 2,500 (8)

500 to 1,800 (8)0 to 500 (9)

1872

2476 2681

82364040

CT 102

DE 46

768

1625

5460

1916 1894

3760

5700 5704

1260

221

MD 488

MA 1362730

5400

1610

7512

7512

63491546

89

NJ 203

1333

2418

1822

5321

2871

5953

5953

3400RI 16

720

7335

4146

10800

2512

VT 323

2184

3420

952

4526

2467

2006 2008 2010

 Tons

U S  HAY  STOCKS  AND  PRODUCTIONCrop Year

December 1Hay Stocks

Alfalfa HayProduction

Other HayProduction

t k M k ti I f ti C t

U S ALL HAY STOCKSDecember 1

75

85

95

105

115

125

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Mil. Tons

G-NP-2202/02/11Livestock Marketing Information Center

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

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Acres (tho

us.)

Southeastern US Acres of Other Hay and All Hay1974‐2010

Other Hay

All Hay

C-N-0201/29/10

JANUARY 1 “BEEF COW FACTORY’U.S., Annual

ReplacementHeifers

Beef Cows

0

20,000

40,000

60,000

80,000

100,000

Ewes All Goats Horses &Ponies

Mule, Burros &Donkeys

6735

83796 74008

8952

Num

ber o

f Hea

d

Inventories of Non‐Bovine Forage Consuming Livestock in Georgia

2002 vs. 2007

0500

10001500200025003000350040004500

Dairy Farms

Ewes

All Goa

ts

Mule, Burros &

Don

keys

Alpac

as

Llam

as

Rabb

itsNum

ber o

f Ope

ration

s

Dairy Cows and Other Types of Hay Consuming Livestock2002 vs. 2007

0

5,000

10,000

15,000

20,000

25,000

Beef Cattle Horses & Ponies

Num

ber o

f Ope

ration

s

Beef Cows and Horses2002 vs. 2007

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.

U.S. HAY & HAY PRODUCT EXPORTSAnnual

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Metric Tons

OtherHay

AlfalfaHay

AlfalfaCubes

AlfalfaMeal &Pellets

02/15/11

Livestock Marketing Information CenterData Source: USDA-FAS, Compiled & Analysis by LMIC

OTHER HAY EXPORTSAnnual

0

200

400

600

800

1000

1200

Japan Taiwan Korea

Metric Tons

2006

2007

2008

2009

2010

02/15/11Livestock Marketing Information CenterData Source: USDA-FAS, Compiled & Analysis by LMIC

ALFALFA HAY EXPORTSAnnual

0

100

200

300

400

500

600

700

800

Japan Korea Taiwan UAE

Metric Tons

2006

2007

2008

2009

2010

02/15/11Livestock Marketing Information CenterData Source: USDA-FAS, Compiled & Analysis by LMIC

0

5000

10000

15000

20000

25000

30000

Alaba

ma

California

Delaw

are

Idah

oIndian

aKen

tucky

Marylan

d

Misso

uri

Nev

ada 1/

New M

exico

North Carolina

Oklah

oma

Rhod

e Island 1/

Tenn

essee

Utah

Washing

ton

Wyo

ming

Other Hay

Alfalfa

Corn

0

50

100

150

200

250

300

350

400

450

500

AZ

CA CN ID IN KS

ME

MA

MN

MT

NV NJ

NY

ND

OK

PA TN UT

VA

WV

WY

2008

2009

2010

2008 = 2.70 million acres2009 = 2.67 million acres2010 = 2.55 million acres

Item U.S. All HaySoutheastern 

All Hay 

Stocks May 1 20.60 3.52Total Production 143.80 25.34Total Supply 164.40 28.86Disappearance 146.50 24.88‐25.8Ending Stocks 17.90 3.06‐3.98

Season Average Price $131 per ton$125‐$135 per ton

Good quality Bermuda Hay

 $‐

 $20.00

 $40.00

 $60.00

 $80.00

 $100.00

 $120.00

 $140.00

Alfalfa Hybrid Bermuda Mixed Hay

$/ac

re

Source: University of Georgia

 $(5.00)

 $15.00

 $35.00

 $55.00

 $75.00

 $95.00

 $115.00

 $135.00

 $155.00

 $175.00

Expected Optimistic Pessimistic

$/to

n

Price Scenario

mgmt

mach

estab

op int

labor

rprs

fuel

chemicals

fert

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 LacyExtension Economist‐Livestockclacy@uga.edu