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Forage Availability and Production in 2013

Forage Availability and Production in 2013 Source: Ross Pruitt, Department of Agricultural Economics and Agribusiness LSU AgCenter
The release of on farm hay stocks as of May 1st provided a less than rosy picture on the state of forage availability in the U.S. On farm hay stocks were estimated at 14.2 million tons, a decline of 33.8% from a year ago. This level of hay stocks set a new record low and was 5.7% lower than the previous record set in 2007. Locally, on farm hay stocks in Louisiana were 114% of last year and 87.5% higher than the state’s five year average. Hay stocks in Colorado, Oklahoma and Texas were at least 40% higher than a year ago, but were at least 20% below their respective five year average while other significant beef cattle states were significantly below a year ago and five year average levels. Total U.S. hay stocks were 34.6% below the five year average for May 1st.
Information on the condition of pasture and range released by USDA NASS for the first two weeks of May also show a notable decline over a year ago. There has been a slight improvement over the first two weeks that have ratings have been released, but pastures rated very poor or poor were 33% for the week ending May 12th. This is a 3% improvement from the previous week, but roughly double the very poor or poor rating from a year ago.
The fact that beef cow slaughter has picked up in recent weeks should not be surprising given the fact hay stocks are significantly down due to an extended winter feeding period and poor pasture and range conditions. These factors are going to be important to watch as there is only expected to be slight increase in acreage devoted to hay production in 2013 which can help reduce feed expenses. Non-alfalfa hay production typically accounts for approximately two-thirds of hay acreage harvested or an estimated 37.3 million acres for 2013. Drought contributed to non-alfalfa hay production being 8% and 11% below the five and ten year averages, respectively, in 2012. Increased yields are going to be necessary to begin to rebuild hay stocks which result in lower costs for producers and provide incentives to retain females.
Of the nine states west of the Mississippi River that have at least 900,000 beef cows(North Dakota down to Texas along with Iowa, Missouri, and Montana), only Missouri is at least 90% drought free. Improved hay production in these states will be very important this year in shaping the intensity of beef cow slaughter for the rest of this year. It’s unreasonable to think hay production in this region (or nationally) will return to historical averages this year, but increased hay yields has the potential to help build stocks as seven of the nine states are expected to be at least equal to last year’s hay acreage.
Time will tell if hay production will increase enough to lower national hay prices to help ease the cost side of the returns equation. As of this writing, there is concern about the pace of corn planting and the potential to lose acreage (and yields) as a result. However, corn futures now are approximately even with a year ago. Production and prices of these two key inputs will have a large impact on whether liquidation of the U.S. beef cattle industry continues in 2013 or eases.