Status of Forage Markets
In this session Josh Callen spoke about the status of forage markets in the U.S..
Josh Callen started in hay production and worked in every part of the business. Josh joined The Hoyt Report in August 2018.
Drought is a big theme in the north and the west of the U.S. due to price inflation, labor shortage, logistical challenges like the trucking shortage, and above average rain on the east coast.
The price of alfalfa hay was higher in 2021 than the previous two years. It cost over $210 per ton. Due to drought we saw only a third of the normal harvest of big bales of timothy first cut and a price increase to an average cost of $311 per ton, this is $25 more than in 2020. There are concerns that the export market can’t sustain these prices. Where drought was worst the production of alfalfa hay decreased up to 50 per cent per total tons.
Hay exports from Canada are up 28 per cent. Approximately 60, 000 metric tons are exported in March. The west coast exports to countries that are seeing logistical issues. Boat/port space is a big issue. Demand is good but ports are super backed up, with more than 50 cargo ships waiting in ports.
China’s trade war in the west means that they are not buying hay from Australia. As a result, Japan and S.Korea have more options. This issue stems from covid, and doesn’t look like it’s getting smoothed over any time soon.
Looking ahead, due to the snow levels the previous winter, we may see improvement in yields, quality and price.
There is a U.S. Parliament proposal that requires ships to take back full loads, to resolve the shipping issues, in the works.
This results in increased slaughter to be able to buy feed for the herd, and lower quality hay and corn silage getting used as a method to scrape by.
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