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2008 Washington State Hay Situation and Outlook

2008 Washington State Hay Situation and Outlook. J. Shannon Neibergs 1 , William T. W. Woodward 2 and Phil J. Peterson 3. 1,3 WSU Extension and 2 Columbia Basin College. ...Challenges. Facing Agricultural Producers. “Fight for Food or Fuel” Structural Change in Supply Response

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2008 Washington State Hay Situation and Outlook

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  1. 2008 Washington State Hay Situation and Outlook J. Shannon Neibergs1, William T. W. Woodward2 and Phil J. Peterson3 1,3 WSU Extension and 2Columbia Basin College

  2. ...Challenges... Facing Agricultural Producers • “Fight for Food or Fuel” • Structural Change in Supply Response • Globalization • Marketing

  3. Light Crude Oil (CL, NYMEX)Monthly Price Chart

  4. Monthly Buy – Sell and ReinvestHypothetical $100,000 Investment Light Crude vs WA Alfalfa Hay

  5. Monthly Buy – Sell and ReinvestHypothetical $100,000 Investment Light Crude vs WA Alfalfa Hay

  6. 2007 California Drought Increases Forage Demand

  7. WA Acres Harvested All Hay Acres up 20,000 acres +2.6% Alfalfa Acres down 10,000 acres -2.3%

  8. WA Hay Production and Yield All Hay up 173,000 tons +5.6% Alfalfa up 80,000 tons +3.7%

  9. USDA Annual Alfalfa Cash Price Hits Record High in 2007 $138

  10. USDA Annual Average Price Cash versus Deflated Prices $138 $67 Price deflation index, 1982 = 100

  11. 2007 PNW Hay Supply StatisticsSmall Change from 2006 to 2007

  12. Dairy Cow Geographical Concentration

  13. Continued Growth in Idaho and California Cow Numbers

  14. 2007 Milk Price Reaches Record High

  15. 2007 Milk Price – Record High http://www.ams.usda.gov/dairy/mncs/graphs/DY20070105aClassIII.pdf

  16. The Feed Pyramid for Dairy Cows http://www.extension.umn.edu/dairy/dairystar/05-12-07-Paulson.htm

  17. California is clearly a hay deficit state Idaho’s index has increased from 46 in 2000 to 66 in 2007.

  18. Other Domestic Demand Factors Steady beef cattle and Calves January 1 inventory Horse Numbers - Unknown but Willing to Pay for Quality Hay

  19. Exports

  20. Year to date Pacific Rim Hay ImportsFrom ALL countries • 2007 YTD total Pacific Rim imports are 99% of 2006 • Japan small decrease offset by Korea increase • USA captures 91% of Korean increase • Not shown by graph, but in the data USA exports increase 83,427 metric tons from ’06 to ’07 – a 4% increase

  21. West Coast Forage Exports to Pacific Rim Source: Port of Portland

  22. Exchange Rate Trends Note “strengthening” of the Loonie and relative “weakening” of the Yen

  23. China’s Emerging Alfalfa Demand

  24. China as a Hay Export Destination

  25. 2008 Hay Outlook Current Production 7,195 Mil. Gal. Expansion Capacity 6,960 Mil. Gal. http://www.card.iastate.edu/research/bio/tools/ethanol.aspx

  26. All Hay Stocks and Production Washington end of year stocks are tight – PNW stocks are very tight http://www.nass.usda.gov/Statistics_by_State/Washington/Publications/Agri-facts/agri2may.pdf

  27. Monthly Price Trends for WA Alfalfa Hay • Consistent June price spike • Continually increasing price trend since 2006 • $15 per ton increase in 2006 and $25 per ton in 2007 2007 2006 Average

  28. California is the Price Leader in the Hay Market http://alfalfa.ucdavis.edu/#acreages

  29. Comments and Questions

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