2014 Southeast Hay Convention
Hay Production Outlook
Weekly Average Hay Prices, Southeastern US May 2011-­‐Current HAY
PRODUCTION
OUTLOOK
$170.00 $150.00 $/ton $130.00 $110.00 Premium Bermuda (rolls) Good Quality Bermuda (rolls) $90.00 $70.00 EXTENSION ECONOMIST-LIVESTOCK
11
5/
26
/2
0
1
7/
26 1 /2
01
9/
26 1 /2
01
1
/2
6/ 2
1/ 011
26
/2
3/ 012
26
/2
5/ 012
26
/2
7/ 012
26
/2
01
9/
26 2 /
11 201
2 /2
6/
2
1/ 012
26
/2
3/ 013
26
/2
0
1
5/
26 3 /2
7/ 013
26
/2
01
9/
26 3 /
11 201
3 /2
6/
2
1/ 013
26
/2
01
4 $50.00 DR. CURT LACY
Data source: USDA-AMS, Montgomery, AL
ProducDon of All Hay, Georgia and Surrounding States 1970-­‐2013 FACTORS INFLUENCING
HAY ECONOMICS IN 2014
14.00 12.00 Recent production and inventory
10.00 Millions of Tons Animal inventory numbers
Fertilizer and input prices
8.00 6.00 4.00 2.00 19
19
70
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
0.00 ALABAMA FLORIDA GEORGIA NORTH CAROLINA SOUTH CAROLINA TENNESSEE Data source: USDA-NASS.
Chart prepared by UGA.
Dec 1 Hay Stocks on Southeastern US Farms, 1970-­‐2013 12.00 10.00 Millions of tons 8.00 6.00 4.00 2.00 LIVESTOCK
INVENTORIES
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
0.00 ALABAMA FLORIDA GEORGIA NORTH CAROLINA SOUTH CAROLINA TENNESSEE Data source: USDA-NASS.
Chart prepared by UGA.
Dr. Curt Lacy,
Livestock and Forage Economist
1
2014 Southeast Hay Convention
Hay Production Outlook
CHANGE IN BEEF COWS NUMBERS
JANUARY 1, 2013 TO JANUARY 2014
JANUARY 1 COW INVENTORY
(1000 HEAD)
U.S., Annual
Mil. Head
-12
40
-30
35
30
-65
Beef
2014 = 29 Million Head
-5
-10
15
Dairy
2014 = 9.2 Million Head
-0.1 Percent
10
10
1
-40
3
86
1987
1990
1993
1996
1999
2002
2005
2008
2011
31
0
20
-10
-110 to -11
-11 to -1
-1 to 3
3 to 87
-4
-1
-31
C-N-02
01/31/14
Livestock Marketing Information Center
-4
-48
-105
2014
-29
-16
-9
1984
-9
63
51
-3
15
3
1
-3
-15
VT 0
NH -1
MA -1
RI 0
CT -2
NJ -1
DE -1
MD -3
15
-20
-8
20
0
-25
-53
0
-0.9 Percent
25
5
21
-11
-1
U.S. Total:
Data Source: USDA-NASS
-255
02/03/14
Livestock Marketing Information Center
Data Source: USDA-NASS
CHANGE IN BEEF COWS NUMBERS
JANUARY 1, 2005 TO JANUARY 2014
HEIFERS HELD AS BEEF
COW REPLACEMENTS
(1000 HEAD)
Mil. Head
-31
74
-4
-114
-30
21
-108
-112
-14
-120
-22
-12
-86
61
-116
-190
-85
-6
-88
-48
-40
-194
-85
6.0
+1.7 %
5.5
-48
-77
-1472
16
-1
-38
-261
6.5
VT 2
NH -1
MA -1
RI 0
CT -3
NJ -2
DE -1
MD -1
25
-5
-75
-12
-53
-116
-1
5.0
-1500 to -85
-85 to -22
-22 to -1
-1 to 75
-44
4.5
-55
-13
U.S. Total:
January 1, U.S.
7.0
-1
-45
-3632
1984
1987
1993
1996
1999
2002
2005
2008
2011
2014
C-N-38
01/31/14
Livestock Marketing Information Center
Data Source: USDA-NASS
Livestock Marketing Information Center
02/03/14
Data Source: USDA-NASS
JANUARY 1 TOTAL COW INVENTORY
Horse and Pony Inventory by State
U.S., Annual
Mil. Head
160,000
140,000
50
120,000
Number of Head
48
46
44
42
ALABAMA
100,000
FLORIDA
GEORGIA
80,000
NORTH CAROLINA
60,000
SOUTH CAROLINA
TENNESSEE
40,000
40
20,000
38
36
1990
0
1984
1987
1990
1993
1996
Livestock Marketing Information Center
1999
2002
2005
2008
2011
2014
1997
2017
C-N-02A
01/31/14
Data source: USDA-NASS.
Chart prepared by UGA.
Data Source: USDA-NASS
Dr. Curt Lacy,
Livestock and Forage Economist
2
2002
2007
2014 Southeast Hay Convention
Hay Production Outlook
Georgia Average Annual Hay Prices, 1970-2013
$95
$85
$85
$75
$75
$65
$55
Data source: USDA-NASS.
Chart prepared by UGA.
12
10
08
20
06
20
20
02
20
00
04
20
98
20
96
20
19
92
19
90
94
19
88
19
86
19
19
82
84
80
19
19
78
19
76
19
19
72
74
19
70
GEORGIA
19
12
10
08
20
06
20
20
02
20
00
04
20
98
20
96
20
19
92
94
90
19
19
88
19
86
19
19
82
84
80
19
19
19
19
19
19
19
78
$25
76
$35
$25
72
$35
74
$45
19
GEORGIA
19
2014 hay
prices
$65
$45
70
2014 forecast = $75 again with range of $70-$80 per ton
19
$55
19
Georgia Average Annual Hay Prices, 1970-2013
$105
$95
$/ton
$/ton
$105
Data source: USDA-NASS.
Chart prepared by UGA.
FERTILIZER PRICES
HAVE STABILIZED
Weekly Southeastern US FerDlizer Prices $1,300.00 $1,200.00 $1,100.00 $1,000.00 INPUTS
$/ton $900.00 $800.00 Ammonium Nitrate $700.00 DAP (Diammonnm Phospate) $600.00 Potash $500.00 $300.00 Date 5/5/2008 7/14/2008 9/29/2008 12/8/2008 2/23/2009 5/11/2009 7/27/2009 10/12/2009 12/21/2009 3/1/2010 5/10/2010 8/9/2010 10/18/2010 1/24/2011 4/4/2011 6/13/2011 8/22/2011 10/31/2011 1/9/2012 3/19/2012 5/28/2012 8/6/2012 10/15/2012 12/24/2012 3/4/2013 5/13/2013 7/22/2013 9/30/2013 12/9/2013 2/17/2014 $400.00 Data source: USDA-AMS, Montgomery, AL
Chart prepared by UGA
PROFIT OUTLOOK –
BERMUDA SQUARE +
ROUND
MACHINERY PRICES
CONTINUE TO INCREASE
Prices of 1,200-1,500 pound Round Baler
30,000
NUMBER OF ACRES
$/unit cost
25,000
20,000
YIELD (TONS)
SELLING PRICE ($/TON)
4.6 % increase/year
46% increase in 10 years
15,000
10,000
5,000
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
0
Data source: USDA-NASS
Chart prepared by UGA
Dr. Curt Lacy,
Livestock and Forage Economist
3
120.00
BEST
10.00
$280.00
OPT.
8.75
$230.00
MEDIAN
7.50
$180.00
PESS.
6.75
$127.50
WORST
6.00
$75.00
2014 Southeast Hay Convention
Hay Production Outlook
PROFIT OUTLOOK –
BERMUDA SQUARE +
ROUND
ITEM
VARIABLE
COSTS:
FERTILIZER:
NITROGEN
PHOSPHATE
POTASH
LIME
CROP PROTECTION
HERBICIDE
ARMYWORM CONTROL
MACHINERY:
FUEL
REPAIRS & MAINT.
TWINE
IRRIGATION
LAND RENTAL
LABOR - Hay Production
Hauling square hay to barn
OTHER
INTEREST ON OP. CAP.
TOTAL VARIABLE COST
UNITS
LB.
LB.
LB.
TON
UNITS/
ACRE
TOTAL
UNITS
350.00 42,000.00
60.00 7,200.00
180.00 21,600.00
0.50
60.00
APPS
APPS
GAL.
ACRE
BALE
INCHES
ACRE
HRS.
Tons
$
$
PROFIT OUTLOOK –
BERMUDA SQUARE +
ROUND
1.00
2.00
120.00
240.00
19.92
1.00
0.13
6.00
1.00
3.81
3.07
0.00
2,390.40
120.00
15.60
720.00
120.00
457.20
367.92
0.00
$85,153.20
COST ($/
UNIT)
TOTAL
COST
COST $/
ACRE
COST $/
TON
$0.55 $23,100.00
$0.60 $4,320.00
$0.45 $9,720.00
$35.00 $2,100.00
$192.50
$36.00
$81.00
$17.50
$25.11
$4.70
$10.57
$2.28
$11.00 $1,320.00
$14.75 $3,540.00
$11.00
$29.50
$1.44
$3.85
$69.72
$26.74
$3.25
$51.00
$0.00
$38.10
$153.30
$0.00
$24.84
$734.45
$9.10
$3.49
$0.42
$6.65
$0.00
$4.97
$20.00
$0.00
$3.24
$95.82
$3.50
$26.74
$25.00
$8.50
$0.00
$10.00
$50.00
$0.00
7.00%
$8,366.40
$3,208.80
$390.00
$6,120.00
$0.00
$4,572.00
$18,396.00
$0.00
$2,980.36
$88,133.56
FIXED COST: (Click on appropriate link)
ESTABLISHMENT COSTS
ANNUAL FIXED COSTS
ANNUAL FIXED COSTS FOR IRRIGATION
MANAGEMENT
LAND
TOTAL FIXED COST
ITEM
VARIABLE COST
ESTABLISHMENT+FIXED
COST
MANAGEMENT
LAND
TOTAL
COST
CHANCE FOR PROFIT
87,732
16%
84%
75%
Expected
61,598
35,463
31%
50%
69%
50%
% OF REV.
ACRE
1.00
1.00
88,134
120
TOTAL AMOUNT
$88,133.56
23.64 $2,836.24
$22,284.12
$10,800.00
$0.00
6.00% $5,288.01
$0.00
$0.00
$41,208.37
$39.05 $299.34
$5.75
$44.07
$0.00
$0.00
$129,341.93
$140.62 $1,077.85
Quality will be in demand this year
-41,757
93%
7%
Lower inputs
Higher profits
$35,463.23
$295.53
PROFIT IS RETURN TO RISK AND ALL "ZERO" ITEMS IN THE BUDGET.
MAY ENTER YOUR OWN VALUES.
$84,223.97
$79,651.97
$76,671.60
$71,383.59
$35,463.23
$40,751.24
HAY
PRODUCTION
OUTLOOK
DR. CURT LACY
EXTENSION ECONOMIST-LIVESTOCK
CLACY@UGA.EDU
Dr. Curt Lacy,
Livestock and Forage Economist
4
$ / TON
$/Acre
$95.82 $734.45
$35,920.36
$5,288.01
$0.00
Stable sales prices
Pessimistic
9,723
-16,017
69%
84%
31%
16%
BASE BUDGETED NET REVENUE
NET REVENUE PER ACRE
RETURNS TO LAND, LABOR, CAPITAL AND MANAGEMENT
RETURNS TO LAND, CAPITAL AND MANAGEMENT
RETURNS TO CAPITAL AND MANAGEMENT
RETURNS TO CAPITAL
RETURNS TO LAND
RETURNS TO MANAGEMENT
120.00
1.00
1.00
HAY OUTLOOK
SUMMARY
Net return levels (TOP ROW);
The chances of obtaining this level or more (MIDDLE ROW); and
The chances of obtaining this level or less (BOTTOM ROW).
Returns
Chances
Chances
0.10
1.00
1.00
EXPECTED BREAKEVEN TABLE
PROFIT OUTLOOK –
BERMUDA SQUARE +
ROUND
Optimistic
113,867
7%
93%
YEAR
YEAR
YEAR
$23.64
$185.70
$90.00
$0.00
$44.07
$0.00
$343.40
$3.08
$24.23
$11.74
$0.00
$5.75
$0.00
$44.80