Hay is like any other commodity, price is a variable of local supply, local demand, and the price of transportation. This winter my business is off 50-60% from last year but it is steady with price steady to slightly lower.
The negatives for 2010... Dairy cow numbers. Record low milk prices sucked the life out of a lot of dairymen. What Im hearing is that as prices recover for milk and for cows that a lot are planning to get out. This will decrease hay consumption at the same time available hay supplies will increase. NEGATIVE FOR PRICE
Beef numbers should increase with increasing cattle prices in 2010. It may be slow and choppy but look for sometime into 2010-2012 people to start thinking about expanding. This will increase the market for lower quality round baled hay. NEUTRAL FOR PRICE as beef cows dont take a lot of high end hay.
Horse numbers... with the economy facing 10% unemployment for most of this year at least the pleasure horse market will remain under pressure. Last year the Kentucky foal crop was down 20% for commercial horse farms. I havent seen any increase in bookings this year. Several of the tracks have had a lot of trouble filling racing cards. The gaited horse business is under the same economic pressures though I am starting to see some signs of life with at least lookers. Declines in horse numbers and tighter recreational dollars NEGATIVE for PRICE.
I dont see many things positive for price or demand in 2010 in the hay business. Even a weather event wont help much. The other economy is too fragile and most areas will have carry over stocks. Right now I'm anticipating at least a carry forward of a thousand round bales and a thousand square bales. Assuming the rest of the winter stays wet I'll have enough water for first cutting and I figure Im not the only one. So... my prediction for 2010 is 20% decline in price based on current fuel and fertilizer prices.
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