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Hay Prices Reach Record Highs In U.S.

Way down south, where only two inches of rain fell last summer, there are a lot of thin cattle and a desperate need for hay.

I ve got two different farmers who call me every other day asking if our hay is on its way, said Landon Friesen, who operates Southman Alfalfa Producers near Crystal City along with his father Phil and brother Derek.

You hear from the truckers when they come back that there is a lot of skinny cows. From what I hear, it s a pretty sad sight.

Friesen, who ships 99 per cent of the hay grown on their 2,000- acre operation south of the border, said he has 25 loads lined up to go to Texas, but can t find truckers to take it down there.

We actually had to stop selling hay down there because we can t get it loaded, he said. With so much hay going south to Texas and Oklahoma, there s fierce competition for trucks.

A report published by the Chicago Mercantile Exchange in early October pegged alfalfa prices at a record US$196 per ton, after a severe drought in Texas, Oklahoma, and surrounding states saw only two inches of rain fall the entire summer. It added that over 90 per cent of pastures in the two major cattle-producing states were in poor to very poor condition, and the price of hay had spiked 67 per cent in September over the year previous. Other types of hay weren t far behind, at $128 per ton.

The cost of shipping a load of hay to Amarillo, Texas, has risen to $110 to $115 per ton, said Friesen. Even with a convenient backhaul arrangement for a utility trailer manufacturer down there, he still is having trouble lining up trucks, he added.

It s a pretty ideal run, but we re trying to get truckers on to it, he said.

Darren Chapman, who handles hay production and sales for Virden-based Chapman Farms, said his operation has been running hay to Texas since July on commercial trucking lines.

Chapman has been doing business with Texas purebred breeders and feedlots for a few years. Now that the drought has hit hard, demand for hay has increased substantially.

Depending on quality and the location, Canadian hay is worth anywhere from $250 to $350 per ton in Texas. Shipping it there costs about $120 to $160 per ton, he said.

We re not complaining about what we re getting for hay. It s a lot better than the domestic market, he said, adding that hay is worth about $30 per ton more in the U.S. Horse hay shipped to Florida is worth quite a bit more than it is locally, but that market is small, he said. Space on the commercial trucks, however, is limited.

There s only so much freight going down there and coming back, said Chapman.

Both Chapman and Friesen said that this summer s hay crop was good in terms of quality and yield.

U.S. hay stocks for Dec. 1 were estimated at 93 million tons, down from 102 million tons in the same month in 2010. But last year was also a poor year for the hay crop, itself down five per cent from 2009.

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