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Hay prices nearly doubled from 2020 to 2022, but why? Is it exports? Exports remain a small portion of hay utilization. In 2021, just 17% of total west coast production was exported.

But before we get to exports, let's look at where we started the production season. On the first of May, hay stocks were lower year over year. Low inventory to start the season gave a tailwind to hay prices, allowing prices to rise early in the season.  

Grass and Alfalfa hay production are below the 5-year average in many states. The combination...

• 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 
• https://www.youtube.com/watch?v=pico2dBhz0M

• Exchange rates continue to dampen demand for agricultural exports. The yen is the weakest it has been, relative to the dollar, since 1998.

Yesterday U.S. oil prices crashed. WTI oil futures closed at a staggering negative $40.32 per barrel. What does that mean?

Oil storage is full. 

What about international oil prices? They remain unchanged. Brent crude oil closed around $25.41 per barrel. There is a tremendous difference between U.S. oil prices and international oil. Normally, this is an arbitrage opportunity. With COVID disrupting shipping, the U.S. is unable to export oil and close the price gap. 

On first blush, agriculture stands to win. Cheaper fuel abounds. However, oil producers able to slow or stop production will do so. When wells stop producing...