By Kylene Scott
The phone rings and the caller asks, "How do I price my hay?" Or "What is my alfalfa worth?" These are common questions for a U.S. Department of Agriculture market news reporter.
The USDA Agriculture Marketing Service market reporters gather prices of hay sold and create reports that many agricultural publications include. High Plains Journal and Midwest Ag Journal compile reports from across the United States and print them every week on page 8-C.
USDA market reporters make phone calls and canvass their designated areas in order to get accurate prices representative of hay sold in their respective states.
Kansas Department of Agriculture Market News Reporter Steve Hessman said he makes a lot of calls to those actively involved in the hay market to include the prices that are best representative of the hay sold in Kansas.
"Some are producers, some are buyers, some are brokers," he said. "I call about 60 to 70 feedlots the beginning of every month and get their prices and visit with them on the markets."
He does chat with those in the dairy segment as well, but often finds it difficult because of their busy schedules. He also gets prices and information from smaller farmers and ranchers.
"This isn't just the big farmers that we talk to," he said. "We talk to all sizes but we do need to talk to people weekly that are active in the hay market so they have a good feel for the market."
Most importantly, Hessman stressed, reporters only quote actual sales.
"We don't report bids or asking prices and that's one thing that when I visit with people on the phone, I'm able to discuss those (prices) but we can't print them," Hessman said. "In a time like right now, when the market's moving and jumping really, it is hard to keep up."
The time lag does make it difficult for some and the report seems as though it is trailing the market. It's the nature of the beast, he said.
"The numbers that are in the report are the most current information that we have, and we usually have somewhat of a range because not everyone is going to be selling at the exact same price," Hessman said. "We do the best we can to get the quality of hay (in the report)."
Including the quality of hay helps buyers distinguish why the hay is priced as it is.
"Especially on (hay) like dairy hay it's a little easier because you have RFVs (relative feed values) or proteins--those things to go by," he said. "So you can call it supreme, premium, good, fair, whatever grade it might be and that helps."
There's not much of a method to his madness, but the reporter tries to keep things consistent.
"No, we don't use a formula, but we do try to keep that range as narrow as we can so that information is as exact as we can get it," Hessman said. "If it's outside the range we're quoting, we make every effort we can to confirm that by talking to the buyer and the seller to make sure before we print it."
Hessman pushes to have the most current, accurate and reliable information as they possibly can when reporting the hay market in Kansas. Recently, he has been getting calls about pricing Sudan.
"They're just now beginning to bale and trade Sudan, so we've got to get some actual sales before we can report it in the paper," Hessman said. "This morning I talked to some people that have Sudan, and they've been offered a price for their Sudan, but they haven't sold it yet, so we can't print it yet."
He can share the pricing information over the phone with people who call but can't print it in the reports until it has been sold. Hessman said prices are varying for Sudan, mostly because of the variety. The brown mid-rib Sudan is more digestible, so it's going to trade at a higher price than regular Sudan. Hay cut from Conservation Reserve Program grasslands also varies widely in price too.
"CRP grass can vary considerably from old junky stuff that's got a lot of old, dead past years' growth in it versus something that's hayed last year and hayed again this year," Hessman said. "You need to know as many details as you can get to help determine how to classify or what to call that hay."
Hessman said there are a lot of factors to take into consideration when pricing hay.
"First of all it's supply and demand. Like this year we're really short on about every kind of hay. Demand has been really good," he said.
Sellers and buyers both need to know what kind and quality of hay they need during a particular time of year.
"Grinders are bidding prices high enough to purchase dairy hay, which is a higher quality hay, because of the low milk price dairies haven't been very aggressive trying to buy hay." Hessman said.
He said if buyers are trying to compare hay types, for example, find ones that are comparable in feed value--like wheat hay and oat hay.
"They're both similar in feed value, but oat hay is generally going to be worth a little more simply for the fact that wheat beards that can cause eye problems in cattle or horses," Hessman said.
Wheat hay generally has to be ground, processed or fed on the ground so those beards aren't getting in their eyes. Oat hay can have a little sweeter smell but people like oat hay for horses. They like it for small calves to start them versus wheat hay.
"They'll use wheat hay if they have to, but it's not a No. 1," he said. "That's why oat hay will generally bring a little more than wheat hay."
As far as protein goes, farmers and ranchers need to be cognizant of the end market for that particular type of hay. Hessman provided an example with grinding hay.
"Protein is not real important on the alfalfa that goes in the bunk at the feedlot," he said. "They are only getting about two pounds of hay a day, but it's very important to a dairyman, so that's why we test and follow the quality a lot more on dairy hay because it needs to be high-quality hay."
Protein levels in alfalfa do not have to be that high simply because feeders are not buying it for that reason.
"They consider that when they are balancing their ration, but it's not the No. 1 criteria like it is in a dairy ration," Hessman said. "So, all those factors have to be taken into account."
Another example he said is with prairie hay or bluestem versus brome grass. Brome has more protein than bluestem, but bluestem is a very neutral hay that doesn't upset the stomach.
"If you can keep the calf eating, his rumen will stay healthy," Hessman said. "You are not buying it for the protein, when you are starting new calves."
Dairies like to feed bluestem to cows or heifers that are getting ready to calve to help prevent milk fever.
"It's a low potassium hay (bluestem) and that helps keep the calcium-potassium balance in check on this animal before she has her calf," Hessman said. "It's not for the feed value; it's to keep the potassium level down so she doesn't have milk fever. That's kind of a luxury feed when they're doing it for that reason. When prairie hay prices get really high they don't have that luxury and don't use it as much."
Marketing of hay is different from other commodities mostly because it is traded based on supply and demand. For some farmers and ranchers that is a deciding factor for them to be in the hay business.
"A lot of producers are in the hay business because they don't have to mess with the board of trade. They like that freedom to market their own hay," Hessman said. "And some people don't like to grow hay for that reason. They can't take hay to the elevator and sell it any day they want to. They've actually got to be involved in marketing it."
Hay reports can be found on the USDA Agricultural Marketing Service website, www.ams.usda.gov, under the Market News section.
Kylene Scott can be reached by phone at 620-227-1804 or by email at email@example.com.