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February 25, 2002

Bale out: Indiana hay acres, production plunge in 2001

WEST LAFAYETTE, Ind. – Indiana hay growers had the deck stacked against them in 2001, but producers are hopeful they'll be dealt a better hand in the year ahead, said David Petritz, Purdue University Cooperative Extension Service agricultural economist.

Wet weather in the critical production months of May and June, combined with a poor economy and government support programs that encouraged farmers to raise corn and soybeans rather than forages, resulted in just 610,000 hay acres harvested this past year – the fewest since 1929.

"We saw a more than a 23 percent decline in alfalfa production in Indiana in 2001 – the smallest production in six years," Petritz said. "Dec. 1 hay stocks were down 20 percent."

Indiana traditionally ranks among the top 25 states in hay produced for livestock consumption, at a market value of more than $200 million. The most common hay grown is alfalfa.

State hay production slipped from 2.62 million tons in 2000 to 2.04 million tons in 2001. Yield per acre dipped from 3.5 tons in 2000 to 3.3 tons in 2001. Nationally, hay production rose nearly 5 million tons this past year, to 156.7 million tons. U.S. yield per acre slipped from 2.5 tons in 2000 to 2.4 tons this past year.

Smaller hay harvests and tighter stocks affected states throughout the Midwest. The weaker production was offset by an above average hay year in the West. Subsequently, prices remained stable and further motivated Indiana farmers to abandon hay, Petritz said. It may take a poor crop year to revive Indiana's sagging hay industry, he added.

"The western states had both a great acreage and a great crop last year, so there's a lot of hay hanging around out West," Petritz said. "If we're going to get ourselves out from underneath the supply of hay in the western states we're going to have to look at some crop problems here or someplace else. Of course, if you're a producer in Indiana you hope it's someplace else."

Just like 2001, weather will play a major role in hay markets this year, Petritz said.

"Where we go from here is going to depend on what the weather does this spring," he said. "Typically, the highest prices in the alfalfa market in Indiana show up in March and April. If we get a severe cold, wet snap in March or April, we'll probably see the highest prices of the winter, with alfalfa moving up to $125 to $150 a ton at some of our auctions."

Petritz advised Hoosier farmers to do their homework before stepping into the hay business. Farmers also need a keen eye for alternative crop opportunities and changes in markets, he said.

"If I were in the hay business or wanting to get in the hay business, I would find a long-term buyer to work with me through thick and thin before I said I'm going to plant more alfalfa, or harvest more alfalfa, or rent the neighbor's alfalfa field and sell it to somebody else," he said. "We still have the capacity, in spite of the government program, of producing too much hay relative to demand.

"Right now, straw is selling at the same price as alfalfa in some of our auctions. Straw is in short supply. We have a lot of small dairies and horse owners in this state that depend on baled straw. They can't find it and they're paying accordingly. I think planting a good crop of oats on some of our hilly ground, and maybe trying to get an alfalfa crop started, are worth looking at, as well.

"I don't think I'd wade into the 2002 season saying, 'It's all the same as last year, and I'm not going to change my mind about anything.' I think you're going to get a surprise this year, and it could hit you hard in the pocketbook."

Writer: Steve Leer, (765) 494-8415; sleer@aes.purdue.edu

Source: David Petritz, (765) 494-8489; david.petritz@ces.purdue.edu

Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; http://www.agriculture.purdue.edu/AgComm/public/agnews/

Related Web site:
Purdue Forage Information Page

Purdue News Service: (765) 494-2096; purduenews@purdue.edu


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