5. The market environment will be much different
the next 3-5 years compared to the last 5 years,
the profit environment for the protein business
will be much greater than the grain business.
Cattle-fax estimates that corn will trade between $3.50 and $5.50 for the next couple years.
Hay production has increased significantly from 2012.USDA reported September hay prices continue to show that improved moisture conditions through late summer are pressuring feedstuff values. The U.S. average alfalfa hay price was $194 per ton for the month – down $27 from the May high. The U.S. average price for other hay was $140 per ton – down $22 from the April high. Even with these price declines, cattle producers are likely seeing regional differences in hay values. Weighted average regional alfalfa hay prices are in a full range of more than $213 per ton in the Central Plains to $151 in the North. The range in alfalfa hay prices from high to low across regions is $62 per ton, which is actually less than the three-year average of $79. And it is considerably lower than the widest range during that period at $123 per ton. However, it is important to remember that U.S. average alfalfa hay prices are still $29 higher than the three-year average. The U.S. other hay price is seeing a wider regional spread at $95 per ton. Hay excluding alfalfa is cheapest in the Southeast at $95, while producers in the West are paying $190 per ton. That price is only $4 per ton cheaper than alfalfa hay in that region. The $95 per ton range in regional other hay prices is $10 less than last year but $12 higher than the three-year average. The price series shows that U.S. hay prices are dropping on average. However, some regions of the country are experiencing considerably larger price breaks than others. Alfalfa and other hay prices continue to be the highest in the West, where drought conditions remain quite strong. The price data provides confirmation of earlier USDA annual hay production estimates. The 2013 government forecast for alfalfa hay production would make this year’s harvest the second smallest on record since 1954. While other hay production was expected to improve to its largest level since 2004. Current prices and production forecasts suggests prices for other hay may have more room for price reductions. Alfalfa prices could find considerable support around $190 to $200 per ton on a U.S. average basis.
Hay production has increased significantly from 2012.USDA reported September hay prices continue to show that improved moisture conditions through late summer are pressuring feedstuff values. The U.S. average alfalfa hay price was $194 per ton for the month – down $27 from the May high. The U.S. average price for other hay was $140 per ton – down $22 from the April high. Even with these price declines, cattle producers are likely seeing regional differences in hay values. Weighted average regional alfalfa hay prices are in a full range of more than $213 per ton in the Central Plains to $151 in the North. The range in alfalfa hay prices from high to low across regions is $62 per ton, which is actually less than the three-year average of $79. And it is considerably lower than the widest range during that period at $123 per ton. However, it is important to remember that U.S. average alfalfa hay prices are still $29 higher than the three-year average. The U.S. other hay price is seeing a wider regional spread at $95 per ton. Hay excluding alfalfa is cheapest in the Southeast at $95, while producers in the West are paying $190 per ton. That price is only $4 per ton cheaper than alfalfa hay in that region. The $95 per ton range in regional other hay prices is $10 less than last year but $12 higher than the three-year average. The price series shows that U.S. hay prices are dropping on average. However, some regions of the country are experiencing considerably larger price breaks than others. Alfalfa and other hay prices continue to be the highest in the West, where drought conditions remain quite strong. The price data provides confirmation of earlier USDA annual hay production estimates. The 2013 government forecast for alfalfa hay production would make this year’s harvest the second smallest on record since 1954. While other hay production was expected to improve to its largest level since 2004. Current prices and production forecasts suggests prices for other hay may have more room for price reductions. Alfalfa prices could find considerable support around $190 to $200 per ton on a U.S. average basis.
