The future of Summit County’s four remaining dairies hang in the balance and recent rain showers have only complicated the situation.
The global market has pushed milk prices to a low comparable with the 1950s and dairies across the country are simply trying to hang on and wait out the slump. Making matters worse, premium hay prices for the cows were at an all-time high last year. In April, Summit County’s dairymen said that unless hay prices came down in June by half, they’ll all be out of business.
The rain has kept this year’s prices up in the air.
Dave Ure said there are a lot of negotiations going on. As far as he knows, not a “lick of hay” has been sold in Utah as dairies demand the prices come down.
Sterling Banks at the Utah State University extension office in Coalville said he predicts the prices to be lower this year, but still over what Glen Brown of Brown’s Dairy in Coalville the largest grossing agricultural operation in the county said will be affordable.
“The cash flow for dairymen isn’t there,” Banks said. “They can’t pay the higher price.”
With high hay prices and low milk prices in 2008, most smaller dairies in the country were breaking even or losing money. At a meeting of hay growers in January that Banks attended, he said many growers said they were going to ask those same prices in 2009 despite pleadings that it would destroy many of their best clients.
David Bailey, vice president of organization for the Utah Farm Bureau Federation, said the recent rain damaged the first hay crop of the season. Farmers who cut their crop early or didn’t get wet will be able to ask premium prices. Also, because premium hay was damaged, all dairies in the region will be in competition for the same product.
The rain will hurt most Utah hay growers because local buyers will now need to buy hay from elsewhere, he said.
The longer hay matures, the less nutrient value it holds, which means farmers waiting for their crops to dry to cut it are losing value every day. That likely means the hay cut within the next couple of weeks will only be worth around $100 per ton a price that is affordable. Unfortunately, dairies like Brown’s need top-quality product.
Bailey said many Utah dairies purchase hay from Idaho. Because of the rain, the best hay will likely fetch $180 per ton, said Don Hale, president of the Idaho Hay and Forage Association.
He’s predicting hay of all varieties will likely be about $50 less than last year. That’s in line with Bank’s and Bailey’s higher-end predictions, but still more than Summit’s dairymen said they can afford.
The cheaper, but less nutritious hay, can be mixed with premium product for a good feed, so dairies will likely buy both kinds, Hale said. He’s encouraging Utah buyers to make their orders now since the whole harvest will be pushed back several weeks on account of the rain.
Once the hay dries, it will be harvested quickly since warm temperatures could prompt it to bloom, further reducing nutritional value, he said.