Dry weather leading to hay shortage, higher prices

Hay is fetching sharply higher prices at weekly auctions, as heat-stressed pastures are producing lower yields and truckers are refusing to haul large round bales due to enforcement of regulations requiring state and county permits.

"The DOT (Iowa Department of Transportation) has decimated the hay market in Eastern Iowa," said Dale Leslein, manager of the hay auction at Dyersville Sales Co. "Two-thirds of the hay produced comes in 5-foot-round bales. In 1988, when we had a drought, you could put round bales on a truck and haul it where it was needed.

"In 2000, the DOT required haulers to have a state oversize load permit. Last year, they decided you also need a permit for each individual county where you drive on county roads.

"If you're hauling hay into Iowa from Minnesota or Wisconsin, you also have to have a medical card. The DOT started handing out $360 fines like coupons and haulers began refusing to move hay from farms to market."

Hay prices have tripled since April, jumping from $70 a ton for large round bales to $200 a ton at last week's auction in Dyersville. The price soared to $250 to $260 a ton for large round bales at Wednesday's auction, which drew sellers from as far away as the Dakotas and Canada.

"I had orders today to 'Buy it at all cost,'" Leslein said. "It didn't matter what the price was. 'Just buy it.'

"We had a tremendous volume today with one of the biggest sales that we've had in months."

Leslein said a hard freeze hit in April, after the alfalfa crop came out of dormancy in March earlier than normal. A lot of the older stands were wiped out or lost a lot of plants and that reduced overall yields.

He said many hay producers turned to corn when it became more profitable, which also reduced the volume of hay available for auction.

"You average about 5 tons per acre for hay, and at $150 a ton you're grossing about $750 per acre," Leslein said. "If you're yielding 200 bushels of corn at $7 a bushel, you're grossing $1,400 an acre, and expenses on hay are very similar to the expenses on corn."

Iowa cattle producers are already looking for alternatives to forage as pastures dry up and hay prices climb, according to Matt Deppe, chief executive officer of the Iowa Cattlemen's Association.

"Closest at hand would be federal release of the Conservation Reserve Program acreage for grazing and/or haying," Deppe said. "We need to take some of the cattle pressure off pastures so they can rejuvenate and be in a healthier position next year.

"We already have producers who are feeding their cattle hay and byproducts of corn. That's much earlier than any other year, and it doesn't take a rocket scientist to understand that."

Deppe said cattle producers are being urged to send documentation of pasture conditions and how the status of hay supplies to their local Farm Service Agency office. The organization is hoping that enough pressure on Washington will prompt an emergency order releasing CRP acreage.

"I know a lot of cow-calf operators are already questioning what they're going to use as a feed source to get their herd through the winter," Deppe said. "Release of the CRP acreage would provide significant relief in the area of forage."

Sen. Chuck Grassley, R-Iowa, sent a letter to U.S. Secretary of Agriculture Tom Vilsack July 12, urging that the USDA allow haying and grazing on acres enrolled in the CRP for as many acres as possible in Iowa.

"Farmers are getting hit hard by the hot weather," Grassley said. "One way we can provide a little relief is to allow cattle producers to hay or graze CRP acres in those counties that are experiencing drought conditions."

The USDA has released CRP acres for haying and grazing in the past, most notably in 1988, when Iowa cattle producers and grain farmers dealt with a severe drought.

Jim Fawcett, Iowa State University Extension agronomist, said counties will have to show that rainfall has been less than 60 percent of the normal average, and crop production will be sharply reduced to get CRP acres released.

"After Aug. 1, there will probably be some relief if the USDA approves a release, but it's not going to provide a lot of additional land for grazing and haying in places like Benton County, which has a very small number of acres enrolled in the CRP," Fawcett said.