neal.mcnamara@heraldbulletin.com

Even though he’s only 23, Matthew Chapman knows a lot about hay.

For example, he knows that hay prices have at least doubled this year, and that his hay stocks as so low, he’ll probably be sold out by Halloween.

“The price hasn’t quite tripled, but it’s getting closer all the time,” said Chapman, who operates Chapman Brothers Custom Baling in Springport in Henry County. “It’s just supply and demand. We have about one-third of the hay that we usually have.”

This has been a record year for hay prices, according to economists, with prices at least doubling because of reasons ranging from drought and ethanol production to, as Chapman said, supply and demand.

In Chapman’s case, he’s moved prices from last year’s $3 to $4 per bale, up to $6.50 to $8.50 per bale. And where last year at this time he’d have around 3,000 bales of hay going into the winter, he currently has only 750.

“I sold quite a bit throughout the summer, and that’s where a lot of it went,” he said.

According to Jim Robb, an economist with the Livestock Marketing Information Center, at the end of the 2006-’07 fiscal year, hay prices were up 11 percent, which is about $11 more per ton. This year’s prices are even 9 percent higher than the last record year for hay prices — caused by drought — in 1997-98.

And Robb doesn’t expect to see prices come down anytime soon.

“We set a record high in 2006-07, and we’re going to set another one this crop marketing year,” said Robb. “We expect hay prices will set a record of about $115 per ton. And horse and dairy-quality hay selling for well over $150 per ton.”

Robb pointed to several factors influencing the rise in prices. Increased production of ethanol has led to increased production of corn. The corn, which would’ve been used for feed, is now going toward fuel, thus an increased demand for hay.

“The U.S. is very soon going to be processing more corn in the next few years into ethanol than we feed in the livestock sector,” said Robb. “This has dramatically raised corn prices. And when you raise corn prices, you raise the price of feed.”

2007 began, in relevant history, with the lowest hay stocks on record, said Robb. Add to that a severe drought in the Southeast and parts of the Midwest, and demand goes even higher.

Sharon McNamee, who owns a horse and cattle barn on County Road 500 West in Anderson, has started having her hay shipped from Wisconsin.

“Usually we grow most of our hay, but we didn’t get enough rain this year,” said McNamee. “Our hay crop, we probably got one-third of what we usually get.”