The Conservative Cave
Current Events => Economics => Topic started by: franksolich on August 02, 2011, 09:28:04 PM
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Earlier today, when I was in the big city, I stopped at a truck stop to get some cigarettes, and got engaged in a conversation with a truck driver from Wisconsin, who'd come down here to haul a trailerload of hay to Texas.
Now, hay is hay; there's just not a whole lot to it.
And we got so much hay here we're drowning in it.
I inquired about the haulage charges; surely the trucking costs exceed the worth of the hay.
He told me no; he said Texans are paying a thousand bucks a ton, for hay.
Whoa.
Now, it takes a whole lot of hay to feed a cow or a steer; I'm sure this raises costs threefold--at least--for Texans in the cattle business.
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The drought here has been pretty severe, I have had to drive from Dallas to Corpus Christi several times this spring and summer, and everything I have seen is all dried up.
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Never ever would guessed that amount -- wow.
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It's very uneconomical to ship it by truck for long distances normally, but droughts takes the grazing down first, long before it gets to the point of nothing for the cattle to drink. So, it's either pay through the nose for hay or liquidate 80% of the herd when there is a serious long-lasting drought. It can actually cause the price of beef to drop, breifly, then climb seriously later in the cycle, if enough ranchers decide to liquidate a large percentage rather than tough it out.
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Never ever would guessed that amount -- wow.
Well, what's weird about it--it's a regional cultural thing, I guess--is that hay around here (in Nebraska at least) is merely considered a "by-product" of a crop. An eminently useful by-product and a welcome by-product, but just something one doesn't think a whole lot about. In fact, there's so much of it some years (such as this year) that more of it's left to rot back into the soil, than what's baled up for livestock food.
I asked the neighbor earlier this morning; he says those who are doing this, at a thousand bucks a ton, are making $300 a ton clear profit on it (that's net, not gross, profit).
The size of hay bales vary in different parts of the country--even in different parts of Nebraska--and so it's hard to give a "picture" of what a ton of hay looks like, in bales. The truck driver yesterday had explained it to me; it seems to me that two bales each about 8' long, 3' high, and 3' wide, is a ton. But this is a very ambiguous guesstimate.
I suppose I could ask Carl here, but he's in upstate New York and this is Nebraska, and I'm very sure there's a wide variation in the size of bales between these two areas.
A cow or a steer eats up a lot of hay; I just can't see how Texas cattlemen can make a profit, if they're paying a thousand bucks a ton for hay.
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Hay is a commodity that varys in price depending on what the market will bear.
The hay I bale is in 14"x18"x36" bales weighing 50 lbs or so.
Good quality will sell to a dairy farm for around $4.00 each and over in the Boston area for horses will be closer to $10.00/bale.
That is a lot lower then the 1000/ton figure but given the need all is possible.
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I pay $60/round bale (1200-1400 lbs) for clean, fertilized horse quality hay. Blue stem is cheaper, but I have to grain more so it ends up costing me much more. Two days ago, a local grower told me he was sending the last of his hay up to Dallas- at a significant mark-up.
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This year has been a great year for Nebraska Panhandle types. Plenty of rain, heat just when we needed it, but not too much. The hay was looking great when I was up there last month, and Dad said the wheat is coming down now- heavy loads per acre too.
Now- I will date myself a small tad. Growing up in the hayfields we used slide stackers and put up 15 to 17 ton stacks. There were only a few ranchers who used bailers in the area. On a good day we would cut and put up 10 to 15 stacks. A great day was 20. We did this from about mid June through the middle of August. I don't even know how many stacks we did total.
Nowdays no one has a slide stacker that works, or uses them anyway. Labor intensive I suppose. One mower, one rake, one or two sweeps, the side stacker made up the typical crew. All of us other than the boss were kids in high school. I made $500 a month, with room and board. Not bad for some dumb country kid from the Sandhills.
This year the grass is great, the wheat is great, and the corn looks to be damn good too. I expect prices will go down on all three within the month, but with the problems down south- maybe not so much.
My opinion.
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Growth of any type hay hasn't been too good down this way.
Ranchers/farmers need it to just keep their stock alive.
I haven't heard any reference to the cost being at the thousand level.
Might have to do a little checking.
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Almost all round bales here, very little of the small squares, and the large squares are really unusual. A lot of it goes to waste every year, but it's easier to just keep rolling up extra bales when you're making some anyway than to risk running short if the limited Winter period when you really need it turns out to be a lot harsher and more protracted than expected.
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I pay $60/round bale (1200-1400 lbs) for clean, fertilized horse quality hay. Blue stem is cheaper, but I have to grain more so it ends up costing me much more. Two days ago, a local grower told me he was sending the last of his hay up to Dallas- at a significant mark-up.
Cow grade around here usually goes for about $2o to $25 for that size round bale. The farmers that bale the fescue on my place only got about 200 bales the first cutting and around 150 two weeks ago. We've had a couple of large rains since then and things are greening up some but if we don't get some showers along for awhile the next cutting won't be much either.
They usually get well over 300 large bales on each cutting but not this year.
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Western New York, Finger Lakes region first cutting alfalfa goes for about $2.75 bale. $25-$30 per round bale.
1 gallon 2% milk is $1.89 here.
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Western New York, Finger Lakes region first cutting alfalfa goes for about $2.75 bale. $25-$30 per round bale.
1 gallon 2% milk is $1.89 here.
I hate you. I pay $3.50 and think I'm getting the good deal.