Reports from around the country forecast a chilling winter's tale for horsekeeping budgets. Hay prices are rising exponentially and supplies are unstable.
First we had the drought in so many states. Drought affects hay supplies because farmers and horse owners feed hay during the summer when animals would normally be on grass. This puts strain on supplies.
At the same time, drought-affected fields yield less hay, fewer cuttings, or possibly hay of poorer quality, decreasing the supply available of hay good enough for horses and dairy farms.
In the Midwest, many farmers turned hay fields to corn fields this year, to cash in on the ethanol boom. (Corn is distilled to make ethanol, which is added to gasoline.)
Competition with dairy farmers for horse-quality hay is another concern.
Strain on supply means the price goes up, whether because the supply is low or because the demand is abnormally high. (Remember Economics 101?)
Ellensburg, Washington hay farms report high prices in spite of rain. The Daily Record newspaper reports: Local hay exporters say the higher prices per ton ? at least $20 a ton more for dairy and cattle-grade hay to a high of an additional $40 for horse grade ? is due to a combination of factors: more aggressive buyers concerned about tight hay supplies, as was the case in 2006, reduced forage inventories worldwide and a continuing, strong overseas demand, namely from Japan and South Korea.
In Anderson, Indiana, hay supplier Matthew Chapman predicts that hay prices will be three times higher this year. He has one-third the supply he had at this time last year.
The New York Times has an excellent article today about the ethanol boom. Because ethanol plants are taking so much corn, there is less left for the grain mills. While most horse grain is not corn-based, you can bet that any instability in the grain market will show up in your per-bag cost of horse feed, or the availability of grain.
The Times suggests that there is a glut of ethanol from this year's corn crop in the Midwest and that the price is dropping but the livestock market can't correct until next year's harvest.
In Tennessee, the outlook is grim, according to a report in the Knox News: Jack Bowden, a farmer near Lenoir City, would normally be cutting his second crop of hay about this time, but there's nothing to cut. His spring cutting yielded only about half a normal crop.
His pastures have disappeared, forcing him to dip into his winter hay supply and buy feed to supplement his cows' diet. If farmers can find hay on the open market, Bowden said, it's selling for about triple the average price.
"When that hay's gone, I guess I'll just have to sell the cows," Bowden said. "There's just nothing to feed them."
Gilbert, Arizona is a few miles outside Scottsdale and calls itself the "hay capital of the world". Even the hay capital is running short of hay.
An article in the Arizona Republic this week quotes Nate LeSueur, manager of The Hay Barn in Gilbert: "LeSueur said some customers are telling him they don't have as many horses because they're getting too expensive to feed.
"The Hay Barn is selling alfalfa at $9 a bale and Bermuda grass hay, which is harder to farm, for $10. Prices were at $8 last year, LeSueur said."
The article also says that boarding barns in the area are increasing stall prices to help with the increase.
Horse owners are especially vulnerable to hay prices because so many people do not have storage capacity for much hay and buy it weekly or monthly.
Stay tuned for more news from the equine economy!