Published on Wednesday, 30 November -0001 00:00
We can call local elevators or farm stores to find out what we would get paid for corn or what we would pay for corn at specific markets. We really can't do that for hay. From September through May we can get a central Minnesota look at hay markets by looking data from the hay auction in Sauk Centre. People can make their own assessments about what this information means to them. Through the summer months we don't have much of a way to look at a central Minnesota Hay market. When people call to ask about hay markets during the summer, I might share information from other markets. My primary source of this information is the USDA Market News. The Web site for this information changed during the last year. I find this now at www.ams.usda.gov/AMSv1.0. On the left side of the page pick "Market News and Transportation Data." Then in the middle of the next page pick "Livestock, Meats, Grain and Hay." Then you'll see a listing for many kinds of crop and livestock market reports. Under the heading "Browse by Commodity" click on "Hay." Then you will see a list of hay market data from various markets all over the country. Some of the closer markets are Pipestone MN, Maurice (NW) IA, Rock Valley (NW) IA, East River SD, Nebraska-Iowa summary, and Kansas. You will also find listings for Idaho, California, Colorado and other places. As with almost anything else you read, it's important to think about how useful the information is. Hay is tested at some markets and at estimated at others. Some markets report the number of loads sold. If the price for premium quality hay at a market is listed at $175 per ton, it might mean more if you know that this is an average of 15 loads that ranged from $150 to $190 or if it was the only load at the sale. One limitation with market reports is that you usually can't tell what the hay looked like. It is also relevant to ask whether the price of hay in another part of the state or country means much related to what I might pay or ask locally. Who are the buyers in that market? What is the hay being used for? What might the balance of supply and demand be like in the area? It seems more obvious to me that farmers need to have a good handle on their own numbers and that it may not work well to manage a farm based on someone else's averages. Market reports, averages, ranges of prices might be helpful as a starting point for consideration. But it is important to know as well as possible what the income and expense items are on your own farm as you determine what you're thinking about when you step into the market place. On one hand it might not matter much what your cost and income items are. When you haul corn to an elevator, they don't ask about your fertilizer or fuel cost in determining what they'll pay you for corn that day compared to what they might pay someone else. If you are buying corn, they don't ask whether you plan to feed the corn to hogs in a $30 hog market or to dairy cows in a $20 milk market. In the long haul, the theory is that the market needs to balance out so buyers and sellers both have an opportunity to make a living. We may have different ideas about how well this works. The hay market seems to be determined to a greater extent by negotiations between individual buyers and sellers compared to grain markets. This makes it more difficult to get a read on the market. It could also mean that hay buyers and sellers get a more direct opportunity to negotiate for a price that balances their needs. Livestock and grain market advisors will nearly always say the first step in developing a marketing plan is to figure out your cost of production so you are able to recognize a price that works well for you if it is offered. It seems just as important to get a handle on your own numbers in buying and selling hay. NOTE: Farm Business Management programs provide a systematic way to keep a record of income, expenses and inventory so production costs can be determined along with other information that can be useful in making farm management decisions.