Hay and Feedstuffs Outlook Dr. Curt Lacy Extension Economist-Livestock.
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Transcript of Hay and Feedstuffs Outlook Dr. Curt Lacy Extension Economist-Livestock.
Hay and Feedstuffs Outlook
Dr. Curt Lacy
Extension Economist-Livestock
Monthly SE Hay Prices
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
1999
2006
Price
Monthly SE Hay Prices
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2001-2005 2006 2007
103.99 million tons total
+7.70% vs. 2006
U.S. Hay StocksDec 1
50
60
70
80
90
100
110
120
130
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Mill
ion
s o
f to
ns
2007 Acres +1%
2007 Yield +4.5%
2007 Production +5.5%
1.39 million tons
Projected Supply, Utilization and Prices for U.S. and Southeastern Hay
U.S.
(million tons)
Southeastern U.S.
Million TonsStocks May 1 15.0 1.5
Total Production 155.4 13.6
Total Supply 170.4 15.1
Disappearance 151.4 17.6
Ending Stocks 19.0 (2.5)
Season Average Price $115.0 $85-$125
Grass hay price
Hay Profitability
Fertilizer Prices 1997-2006
$100
$150
$200
$250
$300
$350
$400
$450
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
$/
ton
Nitrogen (AN) Phosphorous (DAP) Potash (Muriate)
Nitrogen prices have increased 76% since 2002
Fuel Prices 1997-2006
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$/
Gallo
n
Diesel (bulk)
Diesel prices are up 145% since 2002
Impact of Fuel & Fertilizer Prices on Cost of Production
$20$30$40$50$60$70$80$90
$100$110
2002 2008
Hay Variable Cost ($/ ton) Hay Fixed Cost ($/ ton)
Projected Returns for Hay Production 2008
Item Variable Costs Total Costs
Net Returns ($/acre)
$232.50 $27.08
% Chance of Obtaining
83% 46%
Breakeven Price $66.81 $104.79
Based on 7 ton yield
Outlook for Other FeedstuffsCorn SBM
(48%)WCS CSM
(41%)
Beg. Stocks 1.304 351 489 63
Production +Imports
14.393 43,649 6,596 1,205
Disappearance 12.955 43,700 6,685 1,218
Ending Stocks 1.438 300 400 50
Season Price 3.70-4.30
National Price
303-335
Decatur, IL
175-250
Price Paid
202-235
Memphis, TN
Other Key Points Byproducts derive more of value from their
economic substitute more than supply. There is a difference in QUANTITY and
QUALITY of hay available. Horse slaughter ban is/will have impact.
Summary Hay supplies will continue to be extremely tight. High input prices will likely limit much grass hay
expansion. High hay prices will entice other sources of hay to
enter the market. Longer term, we may see some price moderation
but probably not back to previous levels