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The Beef Angle

Drought-withered Hay Supplies Are a Major Issue

USDA data shows hay stocks lower than they've been since 1964. For producers struggling with high feed and grain costs, this is more bad news.

I'm not telling you anything you don't already know, but hay supplies are a real problem right now.

According to the latest Feed Outlook from the U.S. Department of Agriculture's Economic Research Service (ERS), stocks of all U.S. hay stored on farms totaled 76.5 million tons as of December 1, 2012 (see figure). That supply figure is down sharply from a year ago because of - obviously - the effects of the widespread drought of 2012:

When measured relative to the demand for hay, by converting livestock inventories into roughage consuming animal units (RCAU), 2012 hay stocks were the lowest since 1984. The drought-reduced 2012 commercial hay harvest, coupled with diminished availability of forage on pasturelands, led to the drawdown of on-farm hay stocks.

The decline in hay supplies is partially compensated by record production of silage, as growers facing poor grain yields chose to convert their corn and sorghum crops to silage. Also, to assist livestock producers affected by the prolonged drought of 2012, a record 2.8 million acres of Conservation Reserve Program (CRP) land was opened to haying and grazing.

Hay Supplies Are a Major Issue
In case you didn't catch that, stocks are essentially smaller than they've been in nearly 30 years. Silage production per RCAU has steadily increased, and as ERS noted that does in part offset the massive decline in hay stocks seen over the past 3-4 years, but the lack of available hay continues to be a concern.

Rice Dairy feed analyst Jerry Gidel, in an outlook presentation at the recent World Ag Expo in Tulare, Calif., noted that hay crop production in 2012 was the smallest it has been since 1957, and that stocks are actually smaller than they've been since 1964.

Believe it or not, in addition to larger available silage supplies (relatively speaking), one factor keeping a lid on hay prices is low milk prices. Gidel pointed out that with softer milk prices, particularly in California, dairies are sourcing cheaper feedstuffs, and that includes poorer-quality hay.

With any reduction in dairy demand for hay, of course, prices tend to drift lower as well. Speaking from my own previous experience as a cow-calf man, I wasn't typically shopping for the finest alfalfa, so if dairy producers are looking at lower-quality forage sources, this may actually be a dual-edged sword for beef producers.

One lingering concern is the long-term effects of drought. On one hand, producers should be understandably concerned that drought will persist into the 2013 growing season, and that is certainly a possibility, with nearly half the country still gripped by drought as of Feb. 5, 2013.

Perhaps a larger concern, however, is how long will it take the soil to recharge following last year's nearly unprecedented dryness? One University of Missouri researcher says it could take as long as two years for things to get back to normal below the surface.

“I wouldn’t count on a full recovery of soil moisture any time soon,” said Mizzou soil science professor Randall Miles. “Even if parts of the Midwest receive a lot of snowfall and rain this spring, it will take time for the moisture to move deeply into the soil where the driest conditions exist.”

In 2012, Miles found that some roots had to go down as much as 8 feet to extract water. Typically, 1 foot of soil holds 2 inches of water. To recharge completely, a fully depleted soil would require about 16 inches of water over normal precipitation amounts.

“The soil moisture will recharge with a hydrologic process where water moves downward from surface water and fills in the pore space found in the soil,” Miles said. “However, during the winter months it is important to remember that a foot of snowfall equals about an inch of rainfall, so the soil could take some time to recharge.”

If that is indeed the case, there are a lot of regions of the country that will struggle this growing season regardless of what Mother Nature brings to the table.

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