1. Hay and Feedstuffs Outlook Dr. Curt Lacy Extension Economist-Livestock

2. Monthly SE Hay Prices

4. 103.99 million tons total +7.70% vs. 2006

5. U.S. Hay Stocks Dec 1 2007 Acres +1% 2007 Yield +4.5% 2007 Production +5.5%

7. 1.39 million tons

8. Projected Supply, Utilization and Prices for U.S. and Southeastern Hay U.S. (million tons) Southeastern U.S. Million Tons Stocks May 115.01.5 Total Production155.413.6 Total Supply170.415.1 Disappearance151.417.6 Ending Stocks19.0(2.5) Season Average Price$115.0$85-$125 Grass hay price

9. Southeastern U.S. Hay Stocks May 1

10. Hay Profitability

11. Fertilizer Prices 1997-2006 Nitrogen prices have increased 76% since 2002

12. Fuel Prices 1997-2006 Diesel prices are up 145% since 2002

13. Impact of Fuel & Fertilizer Prices on Cost of Production

14. Projected Returns for Hay Production 2008 ItemVariable CostsTotal Costs Net Returns ($/acre) $232.50$27.08 % Chance of Obtaining 83%46% Breakeven Price$66.81$104.79 Based on 7 ton yield

15. Outlook for Other Feedstuffs CornSBM (48%) WCSCSM (41%) Beg. Stocks 1.30435148963 Production +Imports 14.39343,6496,5961,205 Disappearance 12.95543,7006,6851,218 Ending Stocks 1.43830040050 Season Price 3.70-4.30 National Price 303-335 Decatur, IL 175-250 Price Paid 202-235 Memphis, TN

16. Other Key Points Byproducts derive more of value from their economic substitute more than supply. There is a difference in QUANTITY and QUALITY of hay available. Horse slaughter ban is/will have impact.

17. Summary Hay supplies will continue to be extremely tight. High input prices will likely limit much grass hay expansion. High hay prices will entice other sources of hay to enter the market. Longer term, we may see some price moderation but probably not back to previous levels