Lastly, I would point out that while hay markets tend to be very regional, the potential for hay availability concerns are not just confined to areas dealing with drought. While hay is expensive to transport, the wider hay value differences across regions become, the more incentive there is to move hay into greater deficit areas. We have seen this in the past and this is one of the ways markets allocate resources when they become scarce.
Further, one should not ignore the potential implications of drastically higher fertilizer prices this year. Even in areas that have had ample moisture, it is very likely that producers will apply less fertilizer on hay ground than they normally do. If this occurs, there will be yield impacts that result in lower hay production in those areas as well. The net effect could be a much more limited supply of hay as we enter the winter of 2022 / 2023.
I call Kentucky home and the year 2007 is one that I will always remember. A spring freeze hammered our spring forage growth that year and drought impacted production in summer and fall. As we got into late fall and early winter, it became clear that hay was in much shorter supply than expected. Consequently, average quality grass hay prices more than doubled as producers scrambled to find hay to winter their cow herds. Something else that I remember is that a lot of cow-calf producers ended up feeding commodity feeds, rather than hay, to their cows that winter. At that time, alternative feeds were relatively inexpensive, but that is not going to be the case this year. I am not necessarily predicting something like that for the current year, but I do think it is valuable context and drives home the importance of planning for winter hay needs early.
Source : osu.edu