Yes, hay is getting short and we are working off of barn stored reserves at this time. So, not only will we see an increase in hay price due to the end of the hay season, but we will feel it even more (our pocket books, that is) because this stored hay has been "put up" in the barn throughout the season by the hay producers.
"Put Up" you might ask? Basically that equates to $0.30 - $0.50 a bale cost to the producer to store his hay (load the bale of hay from the field onto a trailer, move the trailer to the hay barn – unload the bale of hay from the trailer, and stack the bale of hay in the hay barn). In general, that's why you'll find a difference in the price "in the field" vs "out of the barn".
To make matters worse, everyone who has hay right now knows its present and future value. This year is and will be an interesting test of character for our hay producers!
Market prices nationwide will also be affected by seemingly unexplainable blips on a graph. Here's what I mean...do you remember in June/early July 2006 when hay prices went sky high for about 2 weeks then settled back into their steady price incline?
Well, we are about to experience the same type of phenomenon, but its due to a completely different source and at first glance, it's not going to make any sense at all. So what's about to happen?
Well, late spring, early summer 2006, savvy hay producers/brokers/investors realized that the hay shortage was going to be bad...really bad. So, as most savvy investors tend to do, they invested - at the right time and with a plan.
That plan was to pull fresh hay cuttings off the market or not to release them at all - put them in the barn and store them until hay prices hit "level 1". At level 1, they will release 20-30% of this hay. Result - we will see a very short term stabilization in hay prices. 
For example, a bale of Coastal or Alicia Bermuda Hay could be purchased (resale price) for $2.50 - $3.50 late spring/early summer 2006. By the time mid fall arrived, that same bale cost $4.50 - $5.00 in the field. Now, in the barn (add $0.50) and settling into winter, you are going to find that same bale of hay priced between $4.50 and $8.00!
Another interesting point to note is that, in general, the hay producer or custom baler's profit is almost always in the fourth or last cutting of the season. So, you might imagine how it could be tempting for them to hold on as long as possible.
Theory and reasoning aside, in the next edition, I will be sharing my thoughts with you on what to do NOW about your particular hay situation...About the Author
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Elizabeth Landers
Hay-Bale.com
Premier Horse Hay
Labels: hay shortage
