Drought, shipping challenges, labor and COVID all played a role in hay supply and demand in 2021 and make ironclad predictions for hay markets in 2022 difficult to come by.

On the supply side, there’s just not a lot of hay sitting on farms in the western U.S. May 1 hay stocks in the region showed significant declines from December stocks, and production in 2021 is down, said Steve Hines, University of Idaho Extension educator in Jerome County.

In addition, ill-timed rains in Idaho and other western states on first and fourth cuttings put a hit on dairy quality hay, he said during the university’s Ag Outlook seminar.

“Because of the supply this year, I’ve heard several times that the dairies are less worried about quality. They’re just worried about being able to get hay put onto the dairy,” he said.

One dairy farmer said dairies just seem to be buying and testing the quality later, he said.

“So that tells us that production is down for this year and that disappearance over the winter is likely going to be pretty significant,” he said.

That will be especially true if it’s a hard winter and more energy is needed for both dairy and beef cattle, he said.

Idaho supreme hay, which was selling in the neighborhood of $225 a ton in June, was $265 in September. One dairy producer recently told him hay was being purchased for $300 a ton and dairies are just happy to get it.

Idaho fair quality hay went from $165 in June to well over $225 in November. The spread between supreme and fair quality is not very big, he said.

“That adds some credence to that comment that essentially these dairies are buying hay and then testing it later, just trying to see what they have and then trying to make that fit in the ration,” he said.

Things are tight for beef cattle producers as well. Since May, conditions on well over half of western range and pasture have been categorized as poor or very poor, according to USDA.

Cattle herds have been pulled off the range early, winter range is not in very good condition and beef producers have been going to the hay market when they traditionally might not have, he said.

The U.S. Drought Monitor shows severe, extreme and exceptional drought will continue across the West, and it’s likely going to worsen into the spring. In southern Idaho, some irrigation districts were shut off early or cut back, he said.

“If those winter snow supplies aren’t replaced in the mountains, that condition is only going to worsen,” he said.

It’s hard to predict what’s ahead for Idaho hay prices, but strong prices need Idaho’s May 1 hay stocks to be lower than 400,000 tons or for the milk price to be above $18 a hundredweight, he said.

Milk prices at $17.50 to $18.50 are in the breakeven range. So dairy producers don’t have additional cash to go into the market, and they’ve pretty much laid in their hay supply — hoping to make it through until the new crop starts coming in, he said.

Export demand is improving, but exports need to be able to move from West Coast ports. Domestic demand for hay is strong due to the drought and will remain strong as long as the drought persists. Substitute feed prices are high, so there aren’t a lot of options for other feedstuffs, he said.