Hay becomes red-hot commodity

2012-08-08T08:50:00Z 2012-08-08T08:55:47Z Hay becomes red-hot commodityBy Bruce Falk, Editor Tri State Neighbor
August 08, 2012 8:50 am  • 

The buyers and the sellers flocked in from far and near, filling the yard of an auction business in Rock Valley, Iowa, with their pickups and their tractor-trailer rigs and, most of all, their hay.

The weekly sale Aug. 2 at Rock Valley Hay Auction took on a bit of a carnival atmosphere as auctioneer Clark Ahders beckoned the crowd toward him to begin bidding on the first lot of the session.

“We’re not going to beg you today,” he told the buyers, advising them to expect a brisk pace to the bidding. Such a pace would be needed on this hot, sunny day to get through the numerous lots crammed onto the yard.

No need to worry, though. The auction moved right along as buyers proved eager to bid on the assorted lots of round bales, square bales, big bales, small bales, alfalfa hay of top quality, grass hay of medium quality and long-stored hay of, well, marginal quality.

It all sold quickly as bidders thought about the animals that they must either continue to feed or sell off. The long, hot summer of drought has put the same hard question to those in the crowd, whether they have a few hobby horses or hundreds of head of cattle: Are you willing to pay to make sure they’re fed?

The bidders on this day were all saying yes to that question, turning normal sale numbers on their head. Fresh-looking ditch hay was going for $170 and $180 a ton; a load of top-notch alfalfa drew a top bid of $295 that received a no-sale rejection by the seller. Hay of all kinds was bringing more than double its usual price because pastures are thin or bare and forage supplies have dwindled.

“Prices are at record levels,” said Paul McGill, the owner and manager of Rock Vally Hay. “I don’t want to use the term ‘panic buying,’ but it’s right close to that.”

As a result, the normally laid-back months of July and August have turned into a time of frenzied activity for McGill and his staff.

“Normally, July is one of our slower months,” he said, “with typically 40 to 60 loads of hay to sell each week, but we had 123 loads last Thursday.”

For comparison purposes, consider that in winter, a typically bustling time when the business conducts two auctions a week instead of one, “we usually get around 100 loads for auction over the two sales.”

Most of the buyers, McGill said, are from northwest Iowa, but “what’s different this year is a lot of northeast Nebraska buyers.”

That area has been hit particularly hard by record heat and deep drought.

The sellers, meanwhile, have been bringing in loads from the Canadian province of Manitoba, Wisconsin and Texas. Yes, Texas.

“I’ve never had this happen before,” McGill said, “but we had a load of hay come in from West Texas. That’s kind of hard to figure out,” considering that was an area of extreme drought last year, with a milder version of dry conditions hanging around this year.

Nevertheless, such was the case under these topsy-turvy conditions. But McGill said he didn’t think the wild market will continue indefinitely.

“More of the corn crop is going to be chopped,” he said, providing a new supply of forage and reducing the demand for hay.

In addition, federal officials recently opened hundreds of thousands of Conservation Reserve Program acres to haying and grazing, further easing the forage pressure.

Until the market eases, however, it will result in many more buyers such as Jeff Andrews of Sioux City, Iowa, who raises quarter horses on a small urban acreage.

“I can’t grow my own hay” because of the scant 11-acre size of his property, he said, “and a lot of my suppliers either have retired or plowed up their hay land to plant corn because of the high prices.”

That brought him to Rock Valley, where he bought a load of brome hay for $160 a ton, which he acknowledged was the most he’s ever paid for the commodity.

Similarly, Jim Dieters of Larchwood, Iowa, a self-described small-time producer of stock cattle, spent $170 a ton for a load of grass hay, again the deepest he’s ever dug into his pockets to feed his animals.

But the veteran stockman appeared to be taking it all in stride.

“That’s what it is,” Dieters said of the price, a good-natured smile stretching across his face. “That’s what you have to do.”

Copyright 2015 Tri State Neighbor. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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