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 A Prism Business Media Publication January 24, 2006 |  
Ehay WEEKLY CONTENTS
Low-Cost Feed Helped Drive 2005 Dairy Expansion
Top of the News Budget More Money For Gas And Diesel In 2006
State Reports Minnesota North Dakota Pennsylvania
Events Nebraska Irrigation Workshop
Discusses Ways To Reduce Costs
Western Canadian Forage Summit Coming Up Jan. 26-27 Central Plains Irrigation Conference To Be Held Feb. 21-22 Manitoba Forage Symposium Scheduled March 22-23 Calendar
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Low-Cost Feed Helped Drive 2005 Dairy Expansion
Two years of relatively favorable milk prices and low-cost feed spurred some U.S. dairy expansion in 2005, says Bob Cropp, University of Wisconsin ag extension economist, emeritus. USDA estimated December milk production at 3.9% higher than December 2004 production, the result of 0.5% more milk cows and an increase of 3.3% more milk per cow, he reports. The nation's cow herd averaged 9,034,000 head for the year, compared to 9,010,000 for 2004, an increase of 0.3%. But the main factor for the increase in milk production, Cropp points out, was the relatively strong increase in milk per cow -- for an average of 19,536 lbs. Annual increases in milk per cow for the previous two years were less than 1%. Total estimated milk production for 2005 was 176.5 billion pounds.

As of December 2005, 11 of the 23 states that report milk production to USDA had more milk cows than they did in December of the previous year. Arizona had 1.8% fewer milk cows than it did in 2004, but California, Colorado, Idaho, New Mexico, Texas and Washington reported more. Other states included Indiana, up 1.9%; Michigan, up 1.6%; Ohio, up 2.6%; Oregon, up 0.8%; and even Wisconsin, up 0.9%. For the past several years, Wisconsin has seen a decline in milk cow numbers. The modernizing of existing dairy operations and new dairy operations are slowly offsetting dairy exits and helping to stabilize Wisconsin cow numbers, Cropp says. He expects the increase in U.S. milk cow numbers to put downward pressure on milk prices in 2006. "History clearly shows that when milk cow numbers increase, milk prices decline," he states.

Compared to year-earlier figures, more milk cows and/or more milk per cow led to relatively strong increases in milk production for several states in 2005. The leading state was New Mexico with a 13.8% increase in milk production; followed by Texas, with a 12.3% increase; Idaho, 10.9%; Michigan, 6.4; Wisconsin, 4.6%; Pennsylvania, 4.5%; New York, 3.9%; California, 2.8%; Ohio, 2.6%; and Minnesota, with a 2.2% increase in milk production.

"Milk cow numbers are not likely to decline until perhaps the last quarter of 2006," Cropp adds. "Increases in milk per cow may slow some as the year progresses, but this will depend a lot on available high-quality forages and the summer temperatures in leading dairy states. But as of now, another increase in milk production of 2%-plus from 2006 appears likely."

Source: Bob Cropp, University of Wisconsin-Madison, 608-262-9483.

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Top of the News
Budget More Money For Gas And Diesel In 2006
Barring another major disruption, gasoline and diesel prices are expected to hold steady in 2006, according to a University of Nebraska-Lincoln ag economist. However, producers are being urged to budget more money for gasoline and diesel expenses as world demand for energy grows faster than crude oil is being produced.

Unleaded fuel soared to more than $3/gallon in many parts of the U.S. in 2005, and diesel to around $2.75 in many areas. Prices have dropped, but hay producers shouldn't expect big price declines in 2006. Even before hurricanes Katrina and Rita hit the Gulf States last fall, crude oil prices and wholesale gasoline prices were increasing, says Dennis Conley, University of Nebraska ag economist. The hurricanes damaged many Gulf Coast oil refineries, creating severe shortages and spiking prices. The amount of carryover in the world market is still at all-time low levels in terms of production capacity, according to Conley.

Limited supplies and reduced refining capacity mean even a minor disruption in 2006 will send prices soaring again. Conley says gasoline and diesel prices are following similar patterns. Crude oil, diesel and gas prices are all trending upward. However, world demand should decline somewhat in 2006 as high prices force people to try to reduce the amount of gas they buy, Conley states.

While most fuel prices are trending higher, natural gas prices should go down in 2006. "When the hurricanes hit, natural gas went up to $14 per million cubic feet because they disrupted wells, pipelines and delivery," Conley says. "Now, natural gas is down to $12 per million cubic feet, and the projection for 2006 is around $8 per million cubic feet." Conley says it is difficult to project how natural gas prices will impact nitrogen fertilizer prices. He expects fertilizer prices are still going to be higher in 2006 than in 2005.

Source: University of Nebraska.

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State Reports
Minnesota
The Houston County Forage Council's Quality-Tested Hay Sale was held in Caledonia, MN, on Jan. 13. Eleven loads of good-quality hay were sold with an average relative feed value (RFV) of 135.89 and average protein content of 18.60, bringing an average price per ton of $81.82 in the good category. Large square bales in this category sold between $77.50/ton for 133-RFV hay, and $95/ton for 140-RFV bales. Large round bales sold in a range between $50/ton for 125-RFV hay, to $90/ton for 135-RFV hay. Small square bales sold for $95/ton as a 2.43-ton load of 133-RFV hay and a 4.32-ton load of 139.80-RFV hay. Another 3.55 tons of small squares, at 141 RFV, went for $120/ton.

Fair hay averaged 111.56 RFV, claiming an average price of $67.36/ton. Large square bales sold for $82.50/ton for 7.53 tons of 122-RFV hay. Large round bales sold between $40/ton for 101-RFV hay, to $87.50/ton for 121-RFV hay. A 3.78-ton offering of 104-RFV small square bales sold for $85/ton, while a 3.75-ton group of small square bales sold for $110/ton at 118 RFV.

Large round bales of hay under 100 RFV sold between $35/ton to $65/ton.

Large square bales of wheat straw sold for $80/ton. Small square bales of oat straw sold between $110 to $135/ton.

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North Dakota
Warmer-than normal winter temperatures have helped North Dakota cattle producers stretch their winter feed supply, according to the North Dakota field office of the USDA National Agricultural Statistics Service. Mild conditions allowed many ranchers to continue to graze livestock and retain sufficient hay and forage supplies, according to the report. However, the above-average temperatures resulted in inadequate snow cover in many areas for both alfalfa and winter wheat. Snow cover ranged from an average of 0.7" in the northwestern part of the state to 9.8" in northeastern North Dakota. The state-wide Jan. 1 average of 5.5" was less than the 6.2" reported at the same time last year. Many parts of the state saw temperatures four to six degrees above what is considered normal. Many areas set records for the warmest overnight low temperatures on Christmas Eve. The highest temperature recorded at the North Dakota Agricultural Weather Network stations was 48 degrees at Mandan, while the lowest reading was -10 degrees recorded at Baker, Bowman and Beach.

Source: North Dakota Agricultural Statistics Service and Farm & Ranch Guide.

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Pennsylvania
Pennsylvania hay producers harvested 510,000 acres of alfalfa in 2005, a decrease of 30,000 acres from 2004 figures, according to USDA. Production of alfalfa hay was 12% lower than it was in 2004; 1.33 million tons were harvested in 2005 with an average yield of 2.6 tons/acre. All other dry hay acres harvested totaled 1,090,000 acres in the state -- 70,000 fewer acres than hay producers harvested in 2004. Total production of all other dry hay was at 2.07 million tons, with a yield of 1.90 tons/acre in 2005.

USDA reports that 100,000 acres of alfalfa were newly seeded in Pennsylvania during 2005 for crop production in 2006. This was 20,000 acres less than the amount seeded in 2004.

Alfalfa haylage and greenchop production was at 1.89 million tons in 2005 (green weight) and 4% below 2004 production totals. At least 305,000 acres were harvested for alfalfa haylage and greenchop in 2005, with an average yield of 6.2 tons/acre, compared to 295,000 acres and a yield of 6.7 tons/acre in 2004.

The Pennsylvania Department of Agriculture's recent Hay Market Summary shows hay prices are mostly steady to firm in eastern Pennsylvania. Alfalfa is selling for $100-160/ton; mixed hay, $90-160/ton; and timothy, $90-160/ton. Straw prices in the eastern part of the state are holding steady, at around $100-130/ton.

Lancaster-area hay auctions showed average prices for 229 loads of hay as of Jan. 7. Alfalfa hay sold for $120-175/ton; mixed hay, $115-$175/ton; and timothy, $110-$200/ton. Forty-nine loads of straw sold between $110 to $175/ton.

Central Pennsylvania hay auctions reported prices from 118 loads of hay as of Jan. 7. Alfalfa averaged $115-170/ton; mixed hay, $105-160/ton; timothy, $120-$180. Twenty loads of straw sold at prices between $100 to $150/ton.

View average prices compiled from specific auctions located throughout Pennsylvania online at www.agriculture.state.pa.us/agriculture/cwp/view.asp?a=391&q=131582.

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Events
Nebraska Irrigation Workshop
Discusses Ways To Reduce Costs

An irrigation workshop aimed at helping irrigators caught between rising energy costs and limited water supplies is being sponsored by the University of Nebraska extension service. The workshop, "Irrigation Management Strategies with High Cost Fuels," will be held in four locations throughout the state on four consecutive dates, Jan. 24-27. It will help irrigators get effective use of their irrigation water and energy dollars, focusing on obtaining top pumping plant performance, and on uniformly applying the optimum amount of water.

During each meeting, participants will be trained to use the Water Optimizer. Developed by the university, this decision-support tool allows the user to set specific parameters, such as soil type and irrigation method, to calculate what crops will be most profitable, given costs and available water.

Other workshop topics will include: Lowering energy costs with top-performing pumping plants; soil moisture monitoring systems; energy-saving strategies using pivot and furrow irrigation systems; subsurface drip irrigation; and sprinkler package selection.

The 9 a.m. to 3:30 p.m. meetings will be held: Jan. 24, Chanes R Restaurant, York; Jan. 25, Blarney Stone Restaurant, O'Neill; Jan. 26, Ag Center, Holdrege; and Jan. 27, Panhandle Research and Extension Center, Scottsbluff.

For specific information, call 402-362-5508 (York meeting), 402-336-2760 or 308-632-1480 (O'Neill), 308-995-4222 (Holdrege), or 308-632-1246 (Scottsbluff). Cost is $25.

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Western Canadian Forage Summit Coming Up Jan. 26-27
The Canadian Hay Association and Parkland Agri Services are hosting the Western Canadian Forage Summit Jan. 26-27. The joint conference will take place at the Capri Hotel and Convention & Trade Centre, Red Deer, Alberta. Speakers from all sectors of the forage industry are scheduled to address topics pertaining to timothy hay, alfalfa hay, mixed hay and silage production, as well as harvesting and marketing. A trade show will be held in conjunction with the conference.

Learn more by calling the Canadian Hay Association at 403-320-2727, or visit www.canadianhay.com/.

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Central Plains Irrigation Conference To Be Held Feb. 21-22
Learn about the latest in irrigation equipment and water management practices at the Central Plains Irrigation Conference and Exposition, Feb. 21-22, at the Comfort Inn in Colby, KS. The conference is sponsored by the Central Plains Irrigation Association.

It will feature a review of the renewable energy industry and options that might fit in the Ogallala region. Eight technical sessions will address topics such as: wastewater utilization, residue management for efficient water use, and limited irrigation crop options.

Registration postmarked by Feb. 3 is $60, or $65 for participants applying for Crop Consultant Advisor (CCA) continuing education units. Late registration is $65, or $75 for those applying for CCA. Registration fees include admittance to all sessions and the equipment exposition, a copy of the proceedings, two lunches, breaks and a social hour.

For more information, visit www.oznet.ksu.edu/sdi/REvents/cpia.html. Mail registration forms and payments to Donna Lamm at 760 N. Thompson, Colby, KS 67701.

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Manitoba Forage Symposium Scheduled March 22-23
Plan now for the Manitoba Forage Symposium, scheduled for March 22-23 at the MacDon Product Showcase Building in Winnipeg. The first day of the program has a silage focus, with presentations covering the ensiling process, practical harvesting ideas and silage preservation options.

Presentations on March 23 will be devoted to producing quality cash hay. Participants will be encouraged to think "outside the bale." Presentations will cover key hay market issues, weed-free hay and variety selection.

Learn more by calling the Manitoba Forage Council at 204-322-5427, or visit www.mbforagecouncil.mb.ca/Default.htm.

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Calendar
**Jan. 24 -- Central Maryland Hay and Pasture Conference, Carroll County Agricultural Center, Westminster. Contact Doug Tregoning at dwt@umd.edu, or call 301-590-2809.

**Jan. 25-26 -- Heart of America Grazing Conference, Cave City, KY. Call 270-365-7541 or visit www.uky.edu/ag/forage.

**Feb. 3 -- Northern Indiana Grazing Conference, Shipshewana. Call 260-463-3471, ext. 3.

**Feb. 7-8 -- Nebraska Alfalfa Marketing Association's Mid-America Alfalfa Expo, Kearney. Contact Barb Kinnan at 800-743-1649 or visit www.nebraska-alfalfa.com.

**Feb. 7-9 -- Producing Cash Hay for Virginia's Equine Industry Workshops, Feb. 7-Armory in Chatham; Feb. 8-Southern Piedmont Research Station, Blackstone; Feb. 9-Tidewater Research Station, Suffolk. Registration for each will begin at 8 a.m. and the programs will end at 3:30 p.m. Early registration deadline is Jan. 27. Contact Chris Teutsch at cteutsch@vt.edu, or call 434-0292-5331, ext. 234.

**Feb. 14-16 -- World Ag Expo, Tulare, CA. Learn more at www.worldagexpo.com.

**Feb. 16 -- Indiana Forage Council Annual Meeting and Seminar Presentation, Cornerstone Hall, Salem. Contact Lisa Metts at lmetts1@purdue.edu or 765-494-4783.

**Feb. 22-23 -- Pennsylvania Hay and Silage Conference, Holiday Inn, Grantville. Contact Lisa Crytser at 814-865-2543.

**Feb. 23 -- Kentucky Alfalfa Conference, Lexington. Contact Garry Lacefield at 270-365-7541, ext. 202.

**Feb. 25 -- Bi-State Forage Institute: Focus on Hay, The Stratford Inn, Harvard, IL. Call 847-223-8627.

**Feb. 27-28 -- Idaho Hay and Forage Association Meeting, Red Lion Canyon Springs Hotel, Twin Falls. Learn more at www.idahohay.com/.

**March 10-14 -- 2006 American Forage and Grassland Council Conference, Westin Riverwalk Hotel, San Antonio, TX. Learn more at www.afgc.org, or call Dana Tucker at 800-944-2342.

**March 14-15 -- Midwest Hay Business Conference and Expo, Ramkota Hotel, Sioux Falls, SD. Sponsored by Hay & Forage Grower. Visit www.hayconference.com.

**April 21-23 -- Midwest Horse Fair, Alliant Energy Center, Madison, WI. Learn more at www.midwesthorsefair.com.

**April 28-30 -- Minnesota Horse Expo, Minnesota State Fairgrounds, St. Paul. Learn more at www.mnhorseexp.org.

**Sept. 7-9 -- National Hay Association 111th Annual Convention, Snow King Resort, Jackson Hole, WY.

**Oct. 3-7 -- World Dairy Expo, Alliant Energy Center, Madison, WI. Learn more at www.worlddairyexpo.com.

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Comments from Readers
Send Questions & Comments To...

Lora Berg, Editor, eHay Weekly,

hfg@prismb2b.com

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