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 A Prism Business Media Publication February 7, 2006 |  
Ehay WEEKLY CONTENTS
Don't Overlook Details When Setting Hay Prices
Top of the News U.S. Sheep Industry Continues To Expand Just How Much Hay Do All Those Sheep Eat? Nifty Hay Niches Fed Hay Helps Fertilize Pastures
State Reports Upper Midwest Texas
Events Calendar
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Don't Overlook Details When Setting Hay Prices
Hay producers need to make sure they cover their costs of production when setting hay prices, says Don Ball, Auburn University extension agronomist. Negotiating a fair hay price is important to both hay buyers and sellers, but the ball is in the seller's court because the seller sets the price at which the hay will be offered.

All that seems a bit basic. But Ball says it's not unusual for a hay producer to overlook costs associated with producing hay, which can include harvesting, advertising, storage and transport costs. It's easy to underestimate storage expenses, too. Storage building depreciation can be figured at about 5% of building costs per year, Ball notes. Consider costs of equipment repairs, taxes and insurance. And nutritive analysis of the hay, appearance, and the cost of alternate feeds also influence hay pricing. Yet, Ball notes, the current market is the final determinant of what a buyer will pay.

Ball says buyer and seller also need to ask the following questions. How is the hay packaged? How, and for how long, has it been stored? How will it be transported, who will transport it, and who will pay for it? Will there be difficulty in finding and accessing the place to which the hay is to be delivered? Will the buyer have refusal options? Who will unload the hay? What is to be the method and time of payment?

Communication is the key to avoiding problems, Ball notes. Long-term success in the hay business depends on reputation and trust.

Source: Don Ball, Auburn University. Contact Ball at 334-844-5491.

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Top of the News
U.S. Sheep Industry Continues To Expand
Hay growers with sheep-producer customers should be happy to know that both sheep and lamb inventory numbers -- as well as the total number of operations with sheep -- have increased, according to recent USDA-ARS reports.

The Jan. 1 U.S. sheep and goat report showed a total lamb inventory of 6.23 million head. This is a 2% increase from both 2005 and 2004. The inventory has shown two consecutive year-to-year increases for the first time since 1987 and 1988. Breeding sheep inventory also increased 2%, from 4.53 million head to 4.64 million head. The 3.66 million head of ewes, age one year old or older, rose 2% above last year's number.

The number of operations with sheep totaled 68,280 during 2005, up 1% from both 2004 and 2003. According to the National Agricultural Statistics Service, operations with 500 head of sheep or more account for 47.3% of the total U.S. sheep inventory. Operations with one to 99 head of sheep account for 28.7% of the total inventory, while operations with 100-499 head of sheep account for 24% of the inventory.

Source: USDA and American Sheep Industry Association.

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Just How Much Hay Do All Those Sheep Eat?
Ewes can eat around 770 lbs of hay per year, depending upon production stage, according to Purdue University. The amount of hay a ewe needs is determined by the average weight of the ewes in the flock and the length of time they need to be fed hay. The 770-lb figure is based on a production situation with ewes weighing 175 lbs and needing to be fed hay for six months.

The Purdue example estimates 3.75 lbs of hay are fed per day for 80 days during early gestation, which adds up to around 300 lbs. Ewes in late gestation would receive around 4.25 lbs/day for 40 days, while lactating ewes would eat 5 lbs of hay for 60 days. Purdue animal scientists point out that needs would change for this example depending on ewe weight, length of the feeding period, and when ewes are lambed.

Source: Purdue University.

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Nifty Hay Niches
For more information on niche hay markets, see the articles Nifty Niches and Alpaca Opportunities in the February issue of Hay & Forage Grower, pages 4-6.

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Fed Hay Helps Fertilize Pastures
Hay producers are providing beef customers with more than just feed value -- beef producers often overlook the fertilizer value of the hay being fed. So says John Lory, University of Missouri environmental nutrient management specialist.

A ton of fescue hay contains about 40 lbs of nitrogen (N), 15 lbs of phosphorus (P) and 40 lbs of potash (K), he says. Many of these nutrients pass through the cattle -- non-lactating cows return the equivalent of almost all fed nutrients back to the pasture. Some of the N is lost, so ultimately about 25% of the fed N and all the fed P and K have fertilizer value. The nutrients in a ton of hay are enough to match the P and K nutrient removal rates for one acre of pasture. The fertilizer value of nutrients in a ton of hay adds up to about $15, according to Lory, assuming 40¢ for N, 30¢ for P, and 20¢ for K.

This type of fertilizer only has value if the cow does a good job of distributing its manure around a field. Although cattle tend to deposit most of their manure near feeders and water sources in a pasture, Lory suggests some ways of spreading it. Frequently move feeders and feeding areas around a pasture and increase stocking density of animals. But move them more frequently to prevent over-use of parts of the pasture. Do not use the same pastures for supplemental feeding each year; moving winter feeding areas each year distributes nutrient benefits around the farm.

Producers should also protect water quality by maintaining setbacks between winter feeding areas and streams and lakes. Frozen and saturated soil promotes the movement of manure nutrients in runoff.

Source: University of Missouri. Contact John Lory at 573-884-7815.

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State Reports
Upper Midwest
Upper Midwestern hay prices ending the week of Feb. 3 were generally steady. That's according to the weekly hay market demand and price report for the Upper Midwest, compiled from public and private sales by the University of Wisconsin.

With light-to-moderate trade activity and demand, Nebraska and Iowa hay prices were steady. South Dakota hay prices were mixed and somewhat lower. Missouri hay prices were steady and higher than they were the previous week, with moderate demand and sales activity. Some rain fell in areas of Missouri, where trees and bushes were showing signs of budding. That has many growers concerned that grass may leave dormancy and get hit with a hard frost. Some buyers were finding difficulty locating what they needed. Prices seemed to be a hindrance, because Missouri hay buyers have resisted increases. This led several truckers to take hay to states where they could see some profit. Southwestern Minnesota hay prices were lower than they were the previous week, but sales activity was good. Wisconsin prices at the Lomira hay auction were 32% higher than hay prices in the rest of the Midwest but 10% lower than at the Jan. 6 auction. That's because a snowstorm lowered sales activity and buyer demand.

Illinois hay demand was good, with moderate-to-active sales activity. Hay prices remained steady to higher than they were the previous week. The supply of Illinois hay was light-to-moderate. Many hay loads imported from neighboring states helped the supply. Hay offerings increased slightly at the beginning of the month at Illinois auctions and have managed to keep up with demand. The demand for all types of hay has been good, but in the last several weeks it increased for beef-type hay, bringing a slight increase in some big round bale prices. Demand from the livestock sector has been good, even though snow and cold temperatures have not been a factor.

Midwestern straw prices averaged $2.28/small square bale, $30.88/large square bale, and $23.86/large round bale. Compared to prices the previous week, small square straw bale prices were down 4%. Large square bale prices were up 99% (due to Illinois prices). Large round bale prices were up 6%.

Around the Midwest, small square bales of prime hay (testing greater than 151 RFV) averaged $114.88/ton. Large square bales of prime hay generally went for $109.48/ton. Large round bales of prime hay averaged $82.50.

Grade 1 hay (125-150 RFV/RFQ) averaged $78.06/ton. Large square Grade 1 hay brought around $77.30/ton, and large round bales averaged $59.11/ton.

Small square bales of Grade 2 hay (103-124 RFV/RFQ) averaged $86.67/ton. Large square bales of the same grade brought a medium price of $84.67/ton. Large round bales went for, generally, $50.94/ton.

Source: Ken Barnett, University of Wisconsin. Contact Barnett at ken.barnett@ces.uwex.edu.

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Texas
High hay costs and extended supplemental livestock feeding have pushed Texas drought losses to an estimated $1.5 billion, according to the Texas Cooperative Extension Service. More than 90% of the state's range and pasture land is said to be in extremely stressed condition. Hay supplies are short and expensive. Ranchers are re-culling cattle and selling heifer calves, which should cut the state's cow numbers. Most of the calves have been shipped directly to feedlots due to lack of wheat fields to graze.

Much of the state's hay production was cut in half due to lack of rainfall, driving up hay prices. Planting prospects are said to be looking grim for spring crops, particularly in southern Texas. Most ryegrass and small grain pastures didn't come up, or haven't had enough growth to graze in eastern Texas. Wheat stands have failed or are marginal, bringing significant damage to the overall state wheat crop. Eastern Texas has been one of the hardest-hit regions. Typically, about 750,000-1 million acres of winter pasture in ryegrass or ryegrass blended with oats are planted to offset supplemental feeding bills. Low rainfall kept those plantings from surfacing, according to Texas A&M reports.

Texas Farm Bureau, Texas and Southwestern Cattle Raisers Association and Texas Cattle Feeders Association officials wrote to the White House, Secretary of Agriculture and members of the Texas Congressional delegation. They made an uncharacteristic plea for government assistance, including funding assistance through the Livestock Compensation Program/Livestock Assistance Program and other government programs.

Source: Texas A&M University.

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Events
Calendar
**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 434-292-5331, 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. 21- 22 -- Central Plains Irrigation Conference, Comfort Inn, Colby, KS. Learn more at www.oznet.ksu.edu/sdi/REvents/cpia.html.

**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 4 -- Grass-Finished Meats Seminar, Bloomsburg Fairgrounds, Bloomsburg, PA. Contact Kris Ribble at 570-784-4401, ext. 111, or Dave Hartman at 570-784-6660, ext. 12. Sponsored by Penn State Cooperative Extension and Project Grass Northeast.

**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.

**March 22-23 -- Manitoba Forage Symposium, MacDon Product Showcase Building, Winnipeg, Manitoba. Call the Manitoba Forage Council at 204-322-5427, or visit www.mbforagecouncil.mb.ca/Default.htm.

**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.

**May 25 -- University of Florida Corn Silage And Forage Field Day, Plant Science Unit, Citra, FL. Contact Jerry Wasdin at 352-392-1120 or jwasdin@animal.ufl.edu, or visit www.animal.ufl.edu. Under "Dairy Cattle," click on "Corn Silage Field Day."

**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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