Hay Price Forecasts at the State Level

Higher prices for major crops (e.g., corn, soybeans and wheat) have received considerable attention by analysts, researchers, and producers. A common perception is that acres can be readily bid away from other crops to quickly return to equilibrium price levels. Seldom mentioned are crops that do not trade on a national platform. Principal among these crops probably would be hay from alfalfa and grass. A balance sheet model is developed at the state level for South Dakota. As a state with typically large carryover stocks of hay and multiple markets served, South Dakota presents a stark contrast to states with more stable production, supply, and use. Several structural relations and equations are presented to forecast acres, supply, and price through an inverse demand function. A discussion follows on how to update the price forecast as additional information is obtained. Suggestions are also offered on extending the model to other states.alfalfa price, feed demand, perennial crop, hay stocks

Hay Price Forecasts at the State Level

Higher prices for major crops (e.g., corn, soybeans and wheat) have received considerable attention by analysts, researchers, and producers. A common perception is that acres can be readily bid away from other crops to quickly return to equilibrium price levels. Seldom mentioned are crops that do not trade on a national platform. Principal among these crops probably would be hay from alfalfa and grass. A balance sheet model is developed at the state level for South Dakota. As a state with typically large carryover stocks of hay and multiple markets served, South Dakota presents a stark contrast to states with more stable production, supply, and use. Several structural relations and equations are presented to forecast acres, supply, and price through an inverse demand function. A discussion follows on how to update the price forecast as additional information is obtained. Suggestions are also offered on extending the model to other states.alfalfa price, feed demand, perennial crop, hay stocks, Agricultural Finance,

OBSERVATIONS FROM MANDATORY LIVESTOCK PRICE REPORTING FOR ANALYSTS AND RESEARCHERS

Mandatory livestock price reporting has changed how prices are reported and used. Reporting has affected the availability of many reports and has added new reports and information. A variety of research issues are facilitated by the scope of new information available. However, the new information often needs to be put into meaningful form for direct use. A brief overview of the evolution and implementation of mandatory price reporting is given. The new price reports are then discussed and compared to voluntary reports. There is enough new information that analysts may be able to make different insights into price formation. Special attention is given to new reports that give insights into the short-run cattle supply situation. While the focus is on cattle reports, swine reports are also briefly discussed.Livestock Production/Industries,

Fed Cattle Basis in South Dakota

Producers, brokers, and buyers routinely assess the value of cattle by monitoring cash and futures prices. Basis is the difference between a cash price and a futures price. Basis generally reflects the difference in local supply and demand conditions and quality differences. For a location like Sioux Falls, South Dakota, which is neither a delivery location for live cattle futures contracts nor a slaughter lo¬cation, basis also reflects transportation cost to a par deliv¬ery location. Basis expectations for future dates are usually formed from historic basis levels. Accordingly, actual basis may differ from expectations in a given month because of unexpected changes in any of those factors. The purpose of this paper is to define and discuss fed cattle basis for South Dakota. Knowing recent basis levels gives insights into any shifts or breaks from trend levels. Expected basis levels are provided to use for planning purposes. Specifically, expected basis can used to evaluate profitability by converting a futures price to a local cash price, to determine an expected hedge price, and to relate a forward price quote to a futures quote

Crop Insurance Alternatives for Hay in South Dakota

Crop insurance for hay has been available statewide in South Dakota since the 2001 crop year. Producers across the state use the insurance to different degrees. Typically, in the northwest counties, more than 50% of hay acres are insured; while in the eastern counties, less than 10% of hay acres are insured. What follows is an overview of Forage Production insurance and a discussion of where it may be used and of coverage producers may select when using this risk management tool