2008 Hay and Feedstuff Outlook J. Ross Pruitt Extension Economist – Livestock Louisiana State University AgCenter 2008 Southern Outlook Conference September 22-24, 2008

Hay Situation and Outlook 2008 Southern Outlook Conference September 22-24, 2008

Livestock Marketing Information Center Data Source: USDA/NASS

Livestock Marketing Information Center Data Source: USDA/NASS

Livestock Marketing Information Center

2008 Southern Outlook Conference September 22-24, 2008

U.S. (million tons) Stocks May Total Production150.3 Total Supply169.5 Disappearance149.4 Ending Stocks20.2 Season Average Price$ Southern Outlook Conference September 22-24, 2008

U.S. (million tons) Southeastern U.S. (million tons) Stocks May Total Production Total Supply Disappearance Ending Stocks Season Average Price$150.0$90-$110 (Good Bermuda) 2008 Southern Outlook Conference September 22-24, 2008

U.S. (million tons) Southeastern U.S. (million tons) S.E. Extension Specialist Predictions Stocks May Total Production Total Supply Disappearance Ending Stocks Season Average Price $150.0$90-$110 (Good Bermuda) $120-$150 (LA $/ton) 2008 Southern Outlook Conference September 22-24, 2008

Protein  Soybean meal  Cottonseed meal  DDGS  Whole cottonseed  Corn gluten Energy  Whole cottonseed  Corn grain  DDGS  Corn gluten  Soy hulls

2008 Southern Outlook Conference September 22-24, 2008

Commodity (complex) 2008/09 Beginning Stocks 2008/09 Acreage 2008/09 Production Price Corn (grain, gluten, distiller’s grains) 1.58 bil. Bu.-7%

Commodity (complex) 2008/09 Beginning Stocks 2008/09 Acreage 2008/09 Production Price Corn (grain, gluten, distiller’s grains) 1.58 bil. Bu.-7% Soybean (hulls/meal) 140 mil bu.+18%

Commodity (complex) 2008/09 Beginning Stocks 2008/09 Acreage 2008/09 Production Price Corn (grain, gluten, distiller’s grains) 1.58 bil. Bu.-7% Soybean (hulls/meal) 140 mil bu.+18% Cottonseed (seed, meal, hulls) 9.90 mil bales-13%

Commodity (complex) 2008/09 Beginning Stocks 2008/09 Acreage 2008/09 Production Price Corn (grain, gluten, distiller’s grains) 1.58 bil. Bu.-7% Soybean (hulls/meal) 140 mil bu.+18% Cottonseed (seed, meal, hulls) 9.90 mil bales-13% Peanut (hay and skins) 1.14 bil lbs+19%

 Following slides exhibit current costs of shipping hay  550 mile trip from LA to GA  Quoted rate is $5.00/mile  Assumes hay costs $135/ton  Truck can hold 38 bales  Scenario is updated version from last year

Bale CostTrucking CostTotal CostTotal Per Ton 850 lbs$57.38$72.37$129.75$ lbs$67.50$72.37$139.87$ lbs (Truck carries only 30 bales) $84.38$91.67$176.05$281.68

Bale CostTrucking CostTotal CostTotal Per Ton 850 lbs$57.38$72.37 ($57.89) $ ($115.27) $ ($271.22) 1000 lbs$67.50$72.37 ($57.89) $ ($125.39) $ ($250.78) 1250 lbs (Truck carries only 30 bales) $84.38$91.67 ($73.33) $ ($157.71) $ ($252.34)

 Hay quality questionable due to weather conditions  Decreased fertilizer/herbicide use masked by wetter weather?  Corn prices should moderate but other feeds will be higher.  Producer’s should focus on $/lb. of nutrient not $/lb. of feed.

 Presidential election  Overall economy  Strengthening of the dollar  Continuing financial crisis (Bear Sterns, Lehman Bros, AIG, etc.)  Will investors enter commodities more than already have?  Speculators in the futures market  Acreage bidding war  Wheat market  Horse slaughter ban/sale of horses for slaughter

Discussion 2008 Southern Outlook Conference September 22-24, 2008