If you need to buy acre you might want to buy sooner than later, and if you grow hay you might want to sign up before the Sept. 30 crop insurance deadline passes, says Matt Diersen, SDSU Extension economist.
"We didn't have the typical seasonal declines that would normally happen in August and September," says Diersen. "We've had above-average yields for hay production at the state level, and that usually means prices will decline. But that wasn't the case."
Hay acres were below average in South Dakota in 2007, Diersen said, and since most of the other commodities are being traded at relatively high levels, it might mean the same thing for hay.
"The prices for both alfalfa and other types of hay either need to remain high because of competition, more or less to buy more acres," he said. "Or we'll see some acres drop out of hay production and shift to other crops."
Without any other fundamental news, producers on the demand side of things might want to purchase now, since price declines are unlikely, Diersen said.
"On the supply side of things, we're coming up on the crop insurance purchase deadline on Sept. 30," he said. "That insurance may be helpful; its only drawback is that the price level it offers tends to be less that the current market levels we're seeing now."
Source: SDSU AgBio Communications