Hay Kings Weekly Newsletter - Mississippi River Shipping - Hay and Drought

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Low Water Mark
  • The Mississippi river is at it's 8th lowest level on record.
  • 550 miles of the lower Mississippi is under a low water advisory. 
  • Barge companies declare force majeure
  • What's going on with Shipping - Lower Mississippi River Closes 
Drought across the Midwest is lowering water levels in the Mississippi. Some 60% of all grain is transported along the Mississippi. When shipping issues and unfavorable exchange rates combine, export grain sales will be lower in the coming months. Crop inputs also flow up the river. Fall fertilizer applications may also be hindered. 
Hay Flows Toward Drought... Usually
On June 15, 57% of the U.S. was in drought. As of October 11, 81% of the U.S. is now in some level of drought. The USDA August forecast suggest total U.S. hay production will be down 3% from 2021 and on par with the drought year of 2012. In short, hay supplies will be lower nationally. Normally, hay moves readily from region to region, especially during drought. High fuel prices make shipping hay more expensive. This creates market boundaries where shipping hay becomes impractical. One way to make hay more economical to ship is to increase bale density. Bale density should be a focus for producers, equipment manufactures and brokers. High fuel prices and widespread, season long, drought will limit the availability of forage products for trade between regions. For the remainder of 2022 hay trade will become more regional. 
Strong Dollar, Weak Trade
Hay exports slowed in the first half of 2022 when compared to 2021. Grass hay trade slowed 7% while alfalfa trade slowed 2%. This comes as drought weighed on Northwest grass hay production in 2021. High hay prices and unfavorable exchange rates will continue to weigh on total hay exports, especially to Japan. This comes as 
Total Hay Exports Jan-July (Metric Tons) - By Hay Kings
Country  2019 2020 2021 2022 Change 21-22 % Change 21-22
Japan          864,044          872,217          877,091          846,541                 (30,550) -3%
China          383,862          680,926          831,878          872,832                    40,954 5%
South Korea          323,255          347,852          303,947          322,051                    18,104 6%
Saudi Arabia          261,533          214,143          151,314            60,479                 (90,835) -60%
Taiwan          114,281          133,229          142,294          130,195                 (12,099) -9%
United Arab Emirates          210,170          114,926            61,430            29,533                 (31,897) -52%
Canada            39,189            35,252            23,933            27,690                      3,757 16%
Qatar              7,852            15,778              8,692            18,882                    10,190 117%
Other            27,183            41,552            31,073            31,355                          282 1%
Total      2,231,369      2,455,875      2,431,652      2,339,558                 (92,094) -4%
Alfalfa Hay Exports Jan-July (Metric Tons) - By Hay Kings
Country 2019 2020 2021 2022 Change 21-22 % Change 21-22
China          376,487          660,444          808,021          861,314                    53,293 7%
Japan          413,063          383,522          348,979          367,609                    18,630 5%
Saudi Arabia          261,271          214,143          151,240            60,479                 (90,761) -60%
South Korea          133,833          152,433          130,776          138,942                      8,166 6%
United Arab Emirates          177,461            94,634            45,726            16,212                 (29,514) -65%
Taiwan            40,272            61,927            65,803            59,159                    (6,644) -10%
Canada            28,477            28,520            16,749            17,221                          472 3%
Qatar              4,636            11,742              4,648            15,588                    10,940 235%
Other            13,199            32,613            22,589            21,150                    (1,439) -6%
Total      1,448,699      1,639,978      1,594,531      1,557,674                 (36,857) -2%
Grass Hay Exports Jan-July (Metric Tons) - By Hay Kings
Country 2019 2020 2021 2022 Change 21-22 % Change 21-22
Japan          450,981          488,695          528,112          478,932                 (49,180) -9%
South Korea          189,422          195,419          173,171          183,109                      9,938 6%
Taiwan            74,009            71,302            76,491            71,036                    (5,455) -7%
United Arab Emirates            32,709            20,292            15,704            13,321                    (2,383) -15%
China              7,375            20,482            23,857            11,518                 (12,339) -52%
Canada            10,712              6,732              7,184            10,469                      3,285 46%
Other            17,462            12,975            12,602            13,499                          897 7%
Total          782,670          815,897          837,121          781,884                 (55,237) -7%
Best,
Jon Paul
509-671-2804
 

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