Farm Industry News Blog

Hay 9-1-1

Iowa farmer Jeff Ryan gives a look into the wild hay market.

All that snow we had this past winter kind of melted when we had a couple of above-freezing days. This being the special tier of counties in Iowa where it never gets as nice as the balance of the state, the temperature got just warm enough to melt the snow but not warm up enough to completely get rid of it. The runoff pooled in parts of the field and then froze. To keep it interesting, we also got a couple of weather events where the rest of the state got liquid precipitation. We got ice. That put ice on top of ice in the hay fields. 

That also more or less drove a nail into the coffin lid of a lot of alfalfa fields in northeast Iowa, southeast Minnesota and southwest Wisconsin. What with our scenic topography, we have the kind of land that is well-suited to fields covered with alfalfa instead of corn or soybeans. We also have a lot of livestock operations that use that forage to feed their animals. If you have paid attention to these stories over the years, you may have noticed that I interact with a lot of those very people in my daily life. I find them to be significantly more entertaining than their row-crop brethren. Add in the fact that I can generate some revenue from those interactions and it all works out well for yours truly, thank you very much. 

A lot of my fun over the last 15 to 20 years has come from the Fort Atkinson Hay Auction in nearby Fort Atkinson, Iowa. The weekly hay auctions in Fort have been a tremendous source of material for me each Wednesday for a number of years. The auction's original owner, Bob, retired a couple of years ago. That happened at about the same time that a full-time hay broker re-appeared on my radar. He'd bought a load or two from me in the past, but never did a lot of business with me on a consistent basis. He stopped by my place about the same time that Bob retired. His needs and my needs matched up fairly well, so we started doing business together on a bigger scale. That was about the time that the dairy industry went into a serious slump. The hay I had been selling directly to dairy operators wasn't getting paid for in a timely manner. Accounts Receivable were becoming a bit large for me. Next thing you know, the hay jockey was needing hay and writing a decent check for it each time he got a semi load. It has now gotten to the point where he takes about 90% of everything I sell. 

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The price of corn and soybeans has been high enough the last couple of years that few farmers are raising hay unless they absolutely need it for their own operation. We like it because it works well in our crop rotation and suits our conservation efforts quite nicely. Being able to produce and sell it successfully helps a lot in that equation. When you combine a shrinking supply with steady demand, the math works better for me. When you add in a sudden supply shock to the system like the extended winter and resulting winterkill problem created, you get something close to a perfect storm. The price of hay has risen a bunch in the last 12 months. Heck, it's doubled from there just in the last few weeks. When I first took hay to Fort Atkinson on a gooseneck trailer behind my truck, my goal was to come home with a check for a thousand bucks. That was a great week. A gooseneck would hold 11 bales. A semi would hold 22 to 25 bales, so the goal there was $2,000. 

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The Farm Industry News Blog features commentary from Willie Vogt, Daryl Bridenbaugh and Jeff Ryan.

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