Category: Current Hay Markets

I am sure by now if you are a horse owner, you are getting sick of hay being over $200 a ton and you wishing orchard grass would just start growing on the sides of the roads again like last year. Last year hay was $130 a ton and every barn was overflowing.

Travel down south about 600 miles and start shopping for orchard grass. As I write this post, I am in Sacramento and orchard grass (if you can find it) is selling for more than $350 a ton. Most of the hay down here is actually trucked from central Oregon or Nevada. In fact I saw oat hay, yes oat hay selling for $200 a ton! This market down here is much larger than the horse owners back home in Bend who can still afford the feed for their animals. Farm land down here is used mostly for high dollar crops, alfalfa is grown but it is mostly destined for the large dairies.

I don’t know how many tons of horse hay are trucked down here, but it is a large amount. Many ads down here in California advertise “Central Oregon Premium Hay” with ridiculous prices to cover the long routes the hay is trucked. I really feel sorry for horse owners down here. Maybe next year some fields will be converted to orchard grass or some other crop suitable for horses. Until then, I think this market down here will keep prices up back home in Central Oregon up for the near future.

Hay Costs Breakdown

I have been noticing some complaints on the local Craigslist about how high hay prices are this year, and the price difference between Central Oregon and hay from the Valley.  This post is meant to show why hay prices are as high as they are, and why it is justifiable.  As a hay farmer, I am naturally biased, but this blog is intended to educate, and I will use numbers directly off my budget, and I welcome any readers who see any errors in my math to comment.

Before I jump into the math part of this post, there are other reasons why hay is high this year.  

  1. Jump in commodity prices.  This winter, wheat and corn to near all-time highs, and since farmers can lock in their price for their crop, many plowed under their hay acres in favor of other crops.  This happened all over the country, not just in Oregon. 
  2. Lack of carry-over stocks.  Lots of hay got drenched last year, especially 3rd cutting in Washington.  That meant premium hay was hard to get; dairies and feedlots had a hard time finding the quality hay needed for milking cows and feeder steers.  Most farms don’t sell out until late winter, but this year, most everyone was sold out by December.  That meant there were 6 months of VERY little hay on the market.
  3. Several years of historically low hay prices.  Many hay farmers in Central Oregon face tighter budgets than other areas because of our shorter growing season.  When prices drop, many farms barely get by.  So when prices finally do climb, they climb pretty high, but usually drop back down after more acres are planted.  Simple supply and demand principles.

So now I want to jump into the numbers of growing hay.

Below is a list of costs per acre assuming the hay is put up in 80# small bales and three cuttings with a total yield of 5 tons per acre.

  • Power  $80
  • Fertilizer $250
  • Harvesting $195 ($65 per acre per cutting)

Total = $525 per acre, and that is not counting the cost of water delivery, cost of the land, or all the hours spend irrigating. Those costs differ greatly between farms.

If the yield is 5 tons an acre, at $200 per acre, that is $1000 an acre.  $1000 – $525 = $475 an acre – cost of the land, water, and irrigating labor.  So lets say the hay grower makes $200 an acre, if he farms 100 acres, his profit is $20,000 for the whole year.  In order to make that profit, the grower spend $52,500 in costs.  Not exactly a great business plan.  However some areas have better yield, such as Culver and Madras, but overall, the profit is very small compared to the amount of capital the farmer has into the hay.  But its true, hay farmers will make money this year, will we get rich?  Hardly.  But the $20,000 payment on the baler will sure look less scary….

Some have commented on how much cheaper hay that is grown in the valley is. (The “valley” being land on the west side of the Cascades.) Hay grown in the valley has the advantage of being irrigated primarily by rain, which saves farmers a lot of money, and that is reflected in the lower prices.  However valley hay is usually lower quality, both in palatability and nutrition content. 

I understand that it is hard to swallow coughing up $200 a ton for hay to feed horses, but the prices are set for a reason.  Yes, farmers will make money this year, but remember that we are farming for a profit.  We have huge amounts of capital tied up in our crop and we deserve to make a return on our investment.

If you have any thoughts on this, please comment!

Where has all the orchard grass gone? Sometime in the last three months, Central Oregon has been for the most part cleaned out of any good orchard grass hay.  There is still 3 months or so until the first hay will be cut, and until then, prices will be astronomical. 

I believe that first cutting will only bring mild relief for horse owner’s wallets, and this is because of all the grass being plowed under this winter.  Drive to Madras sometime and look at all the spring wheat coming up in fields that were in grass last year.  Growers have finally given up on $130 a ton hay that barely paid the bills and are now flocking to grain as prices stay at the mid $ 7.60+. 

First cutting will probobly fetch a good $180 a ton,  perhaps even more if there is any rain in June.  That is about what it’s going for now, if you can find anything that is.  What’s interesting to me is that there are other options for feed than orchard grass.  If you read my blog you know that I am a big fan of oats because its a great economical feed.  Besides oat hay there is wheat hay, as well as triticale (mostly for cows).  I used to feed bluegrass straw to stretch my orchard grass out before I grew my own hay.  That is really cheap, but some horses have a hard time mantaining weight.

Times are hard and I believe that hay consumers will be shopping around more than ever to look for relief.  Maybe there will be some growers who will be willing to provide an economical feed…  Until then, if you are going to be buying hay this summer, pray for some warmth this spring and a sunny June!

This has been one interesting hay year for Central Oregon.  Mother Nature froze us all spring, which caused first cutting to be later than usual.  This pushed second closer to mid august for some growers, and third cutting, (if you got one) has been pretty small.  To make things worse,  a lot of second cutting got rained on in september.  Yields turned out to be decent, but with all the rained on hay out there, good quality horse feed will be harder and harder to find.

I have been talking to some small time brokers, and they are already having a hard time finding quality feed to fill the demands of their valley customers.  For this early in the season, this could mean some serious price spiking come January.   If you are shopping for hay, get it now, because later in the year there just won’t be any.  I don’t think it will be as bad as 2008, when prices jumped up to $240-$260 a ton, but I will not be suprised in the least if we see hay flirting around $200 a ton. 

Earlier this season, orchard grass was moving slowly, and around $110 per ton.  Barns were full, and hay was just not moving.  Talking with some alfalfa growers, they said that they managed to get their alfalfa up and tested, and some premium dairy quality was being trucked out of the area, but with milk prices in the tank, demand was just not there.  Now with the rain and the positive milk price movement, alfalfa will be getting moved quicker.  I am feeling bullish on the fall/winter prices, and maybe with all the alfalfa being plowed up down in Klamath Falls, the trend might actually last a few years.