Tough year means lower prices for hay

ELLENSBURG — The year is looking lean for Kittitas Valley hay growers who are still suffering from last summer’s drought and a slow export market.

The first cutting of Timothy hay just finished in recent weeks, but many growers served by junior water rights had to deal with lower quality and yield, said Carl Jensvold, president of the Organization of Kittitas County Timothy Hay Growers and Suppliers.

This year, junior irrigators are expected to get 90 percent of normal supply.

But with water shutoff in early August last summer for growers served by the Kittitas Reclamation District, dry fields were at risk for damage from weeds and pests during the off-season, Jensvold said.

“Unfortunately, the weeds seem to grow better than the Timothy sometimes,” grower Mark Hansen said. “We’re trying to keep the quality high and the invasive weeds are really hurting the quality.”

That quality is key because the primary market for most of the Kittitas Valley’s top-tier Timothy is Japan, where it is fed to racehorses.

Hansen estimated that quality losses could add up to $50 a ton or more.

And even for top-quality Timothy, prices remain far lower than the $300 a ton seen a few years ago. Recent prices were about $180 a ton for premium and $150 a ton for good Washington Timothy, according to the U.S. Department of Agriculture.

That’s because warehouses are still holding on to hay from the 2014 and 2015 seasons, said Don Schilling, president of Wesco International Inc., an Ellensburg-based hay exporter.

“Due to the strength of the U.S. dollar and the port congestion fiasco last year, we have a significant carryover of Timothy,” Schilling said “The port volume reduction obscured a fundamental change in prices in the yen (Japanese currency) and allowed prices to stay high and when the ports returned to normal, it created this oversupply.”

That stored hay is messing with normal market behavior, he said.

For example, a portion of the first cutting was damaged by rain a few weeks ago, Jensvold said. Rain on cut hay can cause bleaching, which lowers the value.

Normally, damage to that portion of the harvest would bump up prices for the remaining high-quality crop, but Schilling said there’s still too much Timothy waiting in warehouses for that to make a difference.

There’s no way out but for exporters to lose some money, he said.

“It’s a bitter pill, but we’re going to come out of this leaner, meaner and more competitive in the long run,” Schilling said. “But it’s going to be a challenging year.”

That up and down is just the nature of the agriculture business, Schilling and Jensvold said.

“Our hay is only worth what people will pay for it, and that’s subject to a lot of factors us farmers can’t control,” Jensvold said. “We’re hoping for another bountiful water year because it takes years to recover from the impact of a drought.”

The long term impacts come because farmers typically harvest Timothy fields for about five years before switching to a rotational crop such as alfalfa or sudangrass and then replanting the high-value Timothy. The drought messes up that rotation, Jensvold said.

“I left my rotation fields fallow last year to put water on the Timothy, so this year I am behind on rotating crops,” he said.

“Big picture, it’s going to take longer to get back to high-value Timothy.”