Heavy rains hamper hay harvest
ROCK VALLEY, Iowa. — Big supplies. Poor quality.
That summarizes the hay market in 2018, says Paul McGill, owner-manager of Rock Valley (Iowa) Hay Auction Co.
"Every year is different," McGill says, and he should know.
He runs one of the largest markets of its type in the five-state area of Iowa, Nebraska, South Dakota, Minnesota, and North Dakota.
Rock Valley is in Sioux County, about 40 miles southeast of Sioux Falls, S.D. The National Agricultural Statistics Service pegs it as No. 1 among Iowa counties in all livestock marketing categories:
• 26,500 dairy cows
• 3.1 million hogs
• 352,485 cattle and calves
• 37,169 sheep and lambs
"Most of the Dakotas, Minnesota ... those areas have had a great supply of hay this year, almost the opposite of last year," McGill says. "However, the quality is not there at all. Most people had a hard time putting the hay up with the rain."
The region started the year with "super-low stocks" — the second lowest for the May 1 stocks report from NASS. Many people in the region had a good first cutting but were hampered by rain on second- and third-cuttings almost everywhere in a 200-mile radius.
"There are some horror stories, where people could not get it (baled properly)," McGill says. There is plenty of wet and even moldy hay around, and a lot of average loads, and only few premium loads, he says. "We've got a market for everything, but it's priced accordingly," he says.
"For the dairymen, it's (been) challenging to find lactating hay — very challenging," McGill says.
Dairies often start cutting alfalfa earlier and often get four cuttings. Some local dairies chopped their alfalfa and were feeding it wet as silage or haylage. This year, some were intending to cut later than the typically mid-September timeframe.
The summer's hay prices have ranged widely with the varying quality, but a medium price for alfalfa has been about $120 a ton, McGill says. The average grass is about $105 to $110 per ton.
July and August hay prices were higher than usual because of the poor harvest conditions. Demand from southern states from Missouri, Kansas and Texas elevated alfalfa prices through the summer, but that has eased with recent rains.
There are "very tight supplies" of top quality grass hay for starting calves, McGill says.
In about 80 percent of the years, he says there there is a fall rally for hay prices from Labor Day to Thanksgiving Day, and McGill thinks this will be no exception. There is as strong possibility of hay prices backing off in January or February. "However, a rough winter can change all of that immediately," he says, noting that harsher winters increase demand and make stored bales more difficult to reach or move to market.
McGill since '96
The Rock Valley Hay Auction had its start in the 1940s as part of a local livestock auction. In 1982, the livestock auction was split off. John Harmelink ran it until McGill, then 29, bought it in 1996.
Now 51, McGill runs the auction with his wife, Erin. McGill grew up in the Rock Valley area and farmed for six years prior to owning the auction.
Over the years, the volume of small square bale business has declined and truck and load sizes have increased. "Now they're 95 percent all semi-loads," he says. In 23 years, the load count is still about 5,000 per year, but the hay per load has doubled.
"Traditionally, it used to be much more volume during the wintertime," McGill says. The company holds sales at 12:30 p.m. Thursdays, year-round. From November to March, they add a Monday sale at the same time.
Auctions in the summer this year ran from 60 to 90 loads. There often are 100 to 125 buyers. McGill's hay auction hires two auctioneers, averaging about a minute of bidding per load.
Most of the hay comes from a 150-mile radius in the Dakotas, Minnesota and Nebraska. Buyers usually are within 50 miles, generally south and east of Rock Valley. Most buy year-round, and produce little or no hay.
"We've been having very large summer auctions for the last five to eight years," McGill says.
That started with the extremely dry year in 2012. And then "sellers realized there was some opportunity to sell much earlier" than they traditionally had.