Hold on to your hay. Prices of the fodder may spike thanks to the high prices of feed grains, even if – in fact, especially if – livestock values fall.

Hay prices have lagged other feed sources since the grains rally started last June, with official data showing prices of baled U.S. alfalfa rising 17% since then to $136/ton.

This reflects a long-term trend, fuelled by the reduction in the U.S. cattle herd, which has declined to its lowest levels since the late 1950s.

Hay values have risen some 60% since 1990, compared with a more than doubling in prices of feed grains, such as corn, which have found alternative industrial uses as sources of ingredients and biofuel.

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