Feed Prices and the Cost of Fuel
As if the wallop to our wallets from high oil costs weren't enough, now comes another prospective hit to the horse budget.
I stopped by a country feed store yesterday to replenish my yearling's supply of growth-formula horse feed, and remarked on the price increase since my last purchase of the same feed. "Yup," said the store owner, "most of our feeds just went up in price. The supplier told us that with more grain being used to produce ethanol, feed ingredients have gone up in price."
Seeing as how I don't want to rush to judgment on the basis of one anecdotal comment, I'd like to know what you're hearing and experiencing about the cost of horse feed. But I can add that I paid more for hay last summer than I've ever paid, due to what the producers had to pay for diesel in order to run their hay-harvest equipment. And since my son-in-law is a farmer, I have a close connection to the subject of diesel prices and their effect on producers of agricultural products.
Seems like we're caught in a vicious circle. And that the horse-expense belt will need to tighten yet another notch.
posted by Juli Thorson @ 11:25 AM
10 comments
10 Comments:
No, Juli, it's not your imagination. I've noticed it, too. And it isn't cheap. But until now I had always put the blame on oil companies who are probably price gouging, or perhaps OPEC who is cutting oil supplies to keep the prices artificially high. But I had never even considered that another unlikely source might benefit: farmers.
It makes sense when you think about it. America has never really taken alternative fuels seriously until now. If we're going to try to replace petroleum products with ethanol and other grain-based fuels, that transition won't come easy. Or cheap. But I think it will benefit us in the long run.
Not only that, but if Juli is right, then the American farmer will finally be able to pay his bills and put some cash away for a much-needed and well-deserved retirement for all their under-rewarded hard work. Yes, we'll have to tighten our horse budget belt another notch, but I don't mind a bit that farmers are smiling about it. If anyone out there deserves to catch a financial break, it's them.
Sierra Lynch
Horse IQ
I'm just chiming in on everything tonight...
I am seeing the same - however in our area north of you, fuel prices have just dropped.
But everything else has gone up - feed - vet fees - trainer fees - farrier fees - everything but my paycheck.
I respond by trying to get the best bang for my buck, by going to only well attended shows in the summer. I am sad I can't go to the small ones, but I spend almost the same money and if I win I only pick up a half a point or one point. At least at the bigger shows when you win it pays off. But its seems like the smaller shows are always more fun in a way bigger shows can never be. The closeness of everyone. And the show management is often better.
There is this show secretary up North here Darlene Chase, she is just a doll - and holy smokes does she know her stuff!! I love her shows.
But going to only the bigger shows cuts down on fuel costs too.
I caught on CNN (or maybe MSNBC--hotel TV) last week that ethanol isn't the only thing to blame for the price increase. New York's recent ban of artifical transfats means a switch to more soy-based oils--the same oils used to make ethanol. The expert being interviewed was dismayed at the total ban (soon to hit Chicago and Louisville as well, and maybe the entire state of California), saying that the industry can't handle a sudden switch. There simply isn't enough bean production to meet even a fraction of the total replacement need for artifical transfats, and that's for New York ALONE. The expert favored a phased-in switch, but commented that even that would be a hard thing to do. He predicted that we'll see a 20-30% jump in the bottom line of a dinner out MINIMUM as this hits other parts of the country. Break out those cookbooks, ladies!
So there's a THIRD upcoming reason for feed costs to go up. It looks like it's a great time to be a soybean farmer, IF you can find the land!
And, it turns out, plant the right bean. Interestingly, Monsanto is engineering special soybean strains that are optimized for their final use. Some make the best frying oil, others are tuned to ethanol (pun intended). As horse owners, I wonder if the nutritional content of these beans is roughly the same for livestock, or if there's a third strain that, well, if you were a farmer and you had those two industries demanding your produce, would you plant basic, generic livestock-feed rated beans?
Interesting support article:
http://www.nytimes.com/2006/12/29/business/29seeds.html?ex=1325048400&en=07daf84d9c70723d&ei=5088&partner=rssnyt&emc=rss
April
Folks, I don't know where you all are located, but here in northern Arizona we are seeing two more complications that are resulting in higher hay and feed prices. My neighbor owns a feed store and runs hay from Phoenix (yes, believe it or not, the Phoenix area is known for feed and food production using irrigated fields). This past year, the supply went down and the price went up due to (1) farm fields available for production surrounding Phoenix being sold for to feed the lucrative and growing residential development market, (2) hay being harvested for its seed for sowing rather than feed or baling, (3) fuel prices to process and transport the hay. In 2007, this guy says hay prices will go up further due to supply and demand because of drought in Texas and California in which they are buying up our Arizona hay at top dollar, resulting in a further supply crunch and price increase. Pelleted feed products made from alfalfa and other products will follow suit. Fortunately, we load the barn with a year's supply so we don't have to deal with arbitrage pricing during the winter, but we will certainly feel the impact when we next buy hay in July. We recently cut back our herd by one and while we are concerned about the hit to our wallets, more frightening is how people on limited incomes will manage. There will be horses less well fed and more sad cases for the humane society and livestock inspector, for certain. And where this spiraling price increase will end is anyone's guess with so many factors driving the prices up for horse owners!
Yes, the ethanol is going to cause a big shift. There are so many ethanol plants going in that by the end of THIS YEAR there is predicted to be a shortfall of corn in the US! The days of cheap corn are over, and I'm a little worried about how rough the adjustments will be.
Also, using corn for ethanol is dumb. Sorry, but it just is. Corn is one of the worst nutrient-gobblers of any plant out there, and should be considered a luxury food, instead of being the (artificially propped up) ultra-cheap staple it has been for decades. We should be working on other sources of ethanol, like sorghum - which is much better for the environment, and produces a lot more fuel per acre.
Anyway, I will be pinching my pennies along with the rest of you horse lovers! Here's wishing cheap hay and resilience to us all this year!
Nov 2006, 2 tons Timothy/Orchard mix, delivered at $275 each ton, and 2 tons Alfalfa /Orchard mix delivered at $255 each ton. 2007? scares me! The bedding is up $1.00 per bag and Senior feed up $.75 per bag. I have 4 horses and worry about people that may not be feeding their horses enough as all these horse care prices climb. It is cold here in Oregon right now and I have had to increase the feed amounts for my "kids".
Our board prices went up $15 a month in December due to rising feed cost. The barn owner posted the notice she got with the price increases because she was sure (and she was right) that there would be an outcry. I think what some fail to realize is that prices for everything shift nearly continually. I personally feel very lucky that I have a job that is secure enough and I make enough per hour to justify the cost of owning 2 horses. This reminds me of one of the beginning posts you had too Juli, about horse ownership, where it's going, how things have changed and what trends we may see in the future. My guess will be that if we are seeing a glut of horses on the market now......it will get worse rather than better with this new twist.
Feed has taken a huge jump
here in Western Washington. Hay
is at an all time high, and the
local farmers have a premium on
their grass hay, if any can be found. Fuel is 20 cents a gallon
higher than 30 miles to the north
or south, I guess we're in a fuel
vortex!
Comment By An Arizona Farmer,
I just wanted to comment on the rise of hay prices (bermuda & alfalfa). There are variety of reasons why the price of hay has risen. 1)Urban sprawls and the reduction of farmland has caused a shortage of hay, which has created a production shortage; 2)The amount of farmland that is being planted with corn for ethanol has also caused a shortage of hay supplies; 3)Rising oil prices and overall inflation has caused not only fuel prices to go up, but also the price of water, alfalfa seed, baling twine, herbicides and fertilizers has also rose dramatically. Farm chemicals alone almost doubled since last year, which really hit us farmers hard in the pocketbook. Another thing that always affects farmers is the weather and pests. Last summer, we took a big hit from butterflys, which wiped out huge amounts of alfalfa acreage. Most farmers sprayed their fields for these pests, however, many farmers saw their entire cutting eaten to only the stems showed. As a result, this cut into our modest profits again. I am glad to see that some of you realize the hardwork and financial hardships that we farmers go through. A few years ago, when hay was going for $4-7 per bale, many farmers were barely breaking even or worse, broke-living on debt/loans. I think horse and cattle people got a little spoiled with the low prices. I didn't grow hay until about three years ago, I used to buy and sell. I used feel real sorry for many of the farmers because the market was so poor that you could only pay them what the market would tolerate. Farming is probably one of the most expensive industries that exists in America. You spend so much, and the profit margins are so small. Thank you to anyone who tries understand the ups and downs of farming. -An Arizona Farmer
I was reading the Mail Call in this months H&R that brought me into this blog because I wanted to add my 2 cents.
Here in Central Oregon hay prices are atrocious. Average of $170 a ton for grass hay. But I can go over to the valley and get it for half that. But (again), the fuel cost makes up for not traveling over to the valley for cheaper hay. They got us coming and going.
And on the Ethanol subject......it is just a way to appease us for an alternative fuel. They have ways of making clean, efficient fuel out of garbage now. And what a better way to harvest our garbage rather than use it for land fill or land that can't be used once it is dumped there. Here is one website about garbage to fuel to make my point. http://www.perc.org/perc.php?id=290
We should have been oil free 30 years ago. But the process has been denied us and I am sure all of us can guess why.
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