Say hay – is it time for another look at this strategic crop?

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Source: Government of Alberta

“Haying season is underway for another year in Alberta,” says Chris Panter, competitiveness and market analysis director with Alberta Agriculture and Irrigation. ”The past few years have been challenging for hay crops with droughts in 2021 and 2023, which resulted in a production drop and an increase in hay prices to levels not seen before in the province.”

Hay prices reached over $270/ton in the spring of 2024 and remain well above 5-year and 10-year averages of $195/ton and $155/ton, respectively. The sustained uptrend in hay values over the past 10 years is striking, as Figure 1 shows. This may be an indication that the province needs to produce more hay.

Figure 1. Historical hay price in Alberta ($/ton)

Image of a graph showing historical hay prices in Alberta

Note: The specification for the hay in the graph above is product of good quality, 50% alfalfa content, farm gate price ($/ton, and 2,000 pounds/ton).

“From sheep to horses and cattle, many animals can eat hay. Cattle markets are performing well with feeder prices rising to record levels in 2024. Focus naturally turns to the supply of hay when considering expansion possibilities in the cow-calf sector. Changing feeding practices such as increased use of annual crops for winter forage and grazing have likely reduced some of the need for hay, especially for the larger cattle operations. Hay will always be an important source of feed in the cattle industry.”

Fewer tame hay acres may reduce the sector’s ability to be resilient in dry years when hay supplies are down and demand is up. Figure 2 shows data from Statistics Canada and a clear trend of declining tame hay acres and production since the mid-2000s, a trend closely mirrored by a drop in cow numbers on cow-calf operations. In terms of production, Alberta produces considerably less hay than it did 20 years ago. A sustained expansion of the cow herd expansion will likely require an increase in tame hay acres.

Figure 2. Tame hay production in Alberta

Image of a graph showing the Tame hay production in Alberta

“With grain and oilseed prices down from recent highs, it might be the right time to consider growing hay as a cash crop,” says Panter. “Smaller farms may find it easier to get into perennial forage production compared to other crops. Forage production comes with a number of advantages and disadvantages.”

For producers who do not raise livestock, growing forages can come with challenges around:

  • equipment cost
  • storage limitations
  • time constraints and perhaps
  • labour availability

Potential opportunities include:

  • a new revenue source
  • crop rotation advantages
  • lower input costs
  • nitrogen fixation (with alfalfa or other legume)
  • spreading workload over summer

“Hay prices can be volatile and options to manage price and other market risks are limited,” says Panter. “Wet weather can negatively impact product quality at harvest, as it does in grain production. The price of hay tends to increase in dry years. However, improved growing conditions and the prospects for better yields can lead to sharp price drops. A situation like this happened in 2002-03, 2010-11, 2015-16 and 2022. Perennial crop insurance is available through AFSC to reduce production risk.”

Producers must be prepared to take an active role in terms of marketing their crop. There is no centralized buying and distribution network for forages. Websites such as Kijiji, Farming the Web, and AgBuySell are examples of ways farmers can market their crop. The forage market is large and diverse. Customers who raise horses, sheep, goats or dairy cows might be looking for a different type of hay than a producer with beef cows.

Factors like cut (first or second), colour (visual appearance), palatability and nutrient quality, as well as bale type and size can influence price. Product evaluation is less subjective with a forage test, for both the buyer and seller.

“Tame hay will remain a strategically important crop in Alberta for the foreseeable future, but each producer should make their own determination on the merits of forage production for their farm,” says Panter.