1. Hay Production Economics and Outlook Katelyn McCullock Dairy & Forage Economist Livestock Marketing Information Center

2. National Hay Outlook Highly Regionalized Forage Quality and Type Local Markets – Many Facets to Prices Beyond Quality Multi-Species Use Large Cash Crop Focus on Alfalfa and Other Hay

3. PERCENT CHANGE MAY 1 HAY STOCKS (2011-2010) Livestock Marketing Information Center Data Source: USDA-NASS US Total: 6%

4. ALL HAY ACRES Livestock Marketing Information Center Data Source: USDA-NASS Lowest Acreage On Record

5. 2011 ALFALFA HAY ACRES (1000 Acres) Livestock Marketing Information Center Data Source: USDA-NASS

6. 2011 OTHER HAY ACRES (1000 Acres) Livestock Marketing Information Center Data Source: USDA-NASS

7. PERCENT CHANGE ALL HAY ACRES (2011-2010) Livestock Marketing Information Center Data Source: USDA-NASS US Total: -7% Other: -9% Alfalfa: -4%

8. Crop Year 2011-2012 Drought in Southwest/Southeast had already been building since Q4 2010. Weather – Large Snow Pack in the Rockies – Flooding Mississippi River Basin – Cool Wet Spring Delays in First Cutting

9. Production Lowest Total Production Since 1988 – Other Hay: 1990 – Alfalfa: <1975 Mixed Yield Results – 2.36 tons/ac, -2.8% from a year ago – Change in Alfalfa was 0% Nationally – Other Hay received greater impacts -7% Nationally

10. Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

11. Livestock Marketing Information Center Data Source: USDA-NASS

12. Livestock Marketing Information Center Data Source: USDA-NASS

13. INTERNATIONAL HAY TRADE (US Total Exports)

14. Hay Trade Export Categories – Alfalfa & Other Hay: 95% of Exports 2% of Total Production Five Countries Buy >95% of Exports

15. HAY EXPORTS AS PERCENT OF PRODUCTION Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

16. 2011 DECEMBER 1 HAY STOCKS (1000 Tons) Livestock Marketing Information Center Data Source: USDA-NASS

17. PERCENT CHANGE DECEMBER 1 HAY STOCKS (2011-2010) Livestock Marketing Information Center Data Source: USDA-NASS

18. Demand For Hay Mild Winter Substitutes Livestock Sector – Regional Differences Overseas Demand – Seasonality

19. CHANGE IN BEEF COWS NUMBERS JANUARY 1, 2011 TO JANUARY 2012 (1000 Head) Livestock Marketing Information Center Data Source: USDA-NASS U.S. Total: -967

20. CHANGE IN MILK COWS THAT HAVE CALVED JANUARY 1, 2011 TO JANUARY 1, 2012 (1000 Head) Livestock Marketing Information Center Data Source: USDA-NASS U.S. Total: 80

21. Supply for Hay Acres – New Seedings Report Yields Weather

22. NEW SEEDINGS 2011 (1000 Acres) Livestock Marketing Information Center Data Source: USDA-NASS

23. NEW ALFALFA ACRES VS. LOST ACREAGE New Seedings Report Livestock Marketing Information Center Data Source: USDA-NASS

24. PERCENT CHANGE OTHER HAY ACRES (2011-2010) Livestock Marketing Information Center Data Source: USDA-NASS US Total: -9%

25. ALFALFA AND OTHER HAY YIELDS U.S. National Hay Yield, 1990-2013 Livestock Marketing Information Center Data Source: USDA-NASS

26. Weather

27. ALL HAY SUPPLY AND DEMAND BALANCE SHEET U.S., Annual 02/18/12 4.110 Year Season SupplyDisap. Beginnin gStocksTotalDisap-EndingAcres Average per May 1 TotalSupplypearanceStocksHarvestedYieldPriceRCAU a RCAU - - - - - - - - - - - - - - - - - - - - Million Tons - - - - - - - - - - - - - - - - - - - -Mil. AcresTon/Acre$/TonMillion 2010/1120.9145.6166.6144.322.259.872.43114.0069.22.412.08 2011/12 b 22.2131.1153.4137.116.255.632.36170.0067.92.262.02 2012/13 c 16.2135.2151.4142.78.756.852.40150.0067.72.242.11 Forecasts

28. ALFALFA HAY SUPPLY AND DEMAND BALANCE SHEET 02/18/12 4.111 Year Season SupplyDisap. Beginnin gStocks Disapp-EndingAcres Average per May 1 ProductionSupplyearanceStocksHarvestedYieldPriceRCAU a RCAU 2010/1110.168.078.067.710.419.973.40123.0069.21.130.98 2011/12 b 10.465.375.767.68.119.213.40190.0067.91.121.00 2012/13 c 8.165.873.969.64.219.353.40155.0067.71.091.03 OTHER HAY SUPPLY AND DEMAND BALANCE SHEET Year Season SupplyDisap. Beginnin gStocksOther Hay Disapp-EndingAcres Average per May 1 ProductionSupplyearanceStocksHarvestedYieldPriceRCAU a RCAU 2010/1110.977.788.576.711.839.911.9597.0069.21.281.11 2011/12 b 11.865.877.769.58.136.421.81130.0067.91.141.02 2012/13 c 8.169.477.573.04.537.501.85125.0067.71.141.08

29. Questions Katelyn McCullock Dairy and Forage Economist Livestock Marketing Information Center katelyn.mccullock@lmic.info Phone: 303-236-0467 Website: www.lmic.infowww.lmic.info