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Higher hay prices may have trickle-down effect on your groceries

Posted at 6:54 AM, Dec 07, 2021

The cost of hay has been creeping up and you might notice the cost come to you at the grocery store.

Sacate Pellet Mills General Manager David Stueve told ABC15 it’s caused by a perfect storm of climate and fuel costs.

“There’s an overall shortage of hay in the western U.S.,” Stueve said. “Hay that’s produced in this area is challenged by a shortage of water.”

Stueve said it would take years of heavy rain to build up water resources enough to grow hay back the way his company is used to.

“I’ve never quite seen the scarcity of hay have such a huge impact on price before.”

Then, there’s the higher price of fuel used to power the trucks that transport hay and farm machinery.

Factor that in with short supply, and costs have been up about 30% for hay, commonly used in fodder that may be used to feed what you eat or drink.

“On the beef side, the end consumer is really a long way from the production side,” said Stueve. “It changes hands a lot before it gets to the grocery store, but…you’re seeing prices going up in the grocery stores. It’s a reflection of the cost of production on beef.”

Feeding the cattle is part of that production cost. The trickle-down effect could be reflected in grocery store prices.

“When we have higher prices for raw materials, we have to raise the cost of production,” said Stueve. “Their prices go up, they have to change their retail pricing to their consumers.”

Stueve said another challenge farmers face with growing hay and other crops is the restrictions the state placed on farms using water through the Drought Contingency Plan, passed in 2019.

More water restrictions are coming next year, with Lake Mead water levels at their lowest on record.