Prices for hay — the legal weed — are on fire. They're rising faster than prices for corn, thanks to a drought in Texas, plus rising demand as farmers avoid paying for more expensive feed. In addition, increased regulations in some areas are making hay farming more difficult.
"A year ago we were getting $5 a bale for grass hay, we're now getting $11.50," says rancher Reid Rosenthal, who helps manage a hay operation near Douglas, Wyoming.
Rosenthal says prices are so good he is seeing better profit margins even after paying higher fuel costs to truck his hay 1,300 miles to parched cattle ranches in Texas. "We have a lot of friends down there, and they're really hurting because of drought and fire conditions," he says on a day his hay is loaded onto a truck. "We're trying to help out. We're making a little bit of money, too. I mean, it's not totally philanthropic."
The USDA forecasts three million fewer tons of alfalfa production this year, and for other types hay, it'll be the lowest production since 1993. This as export demand is up, especially to Japan.
Rosenthal doesn't expect hay prices to return to normal, and this could factor in to how much you pay for beef.
"Are regulations going to go away?" he asks.
"Is Japan going to import less? Is the entire United States going to get its average annual precipitation suddenly and magically starting next year? I don't think so."