A while back, I wrote about the high price of hay in the Pacific Northwest, and the pressure it was putting on horse owners. Now comes news that the hay prices of last summer were an economic freak event, and prices have fallen sharply.

This is a classic economics lesson. Hay in the Pacific Northwest was under high demand globally, and the prices rose to reflect that. At a certain point, the prices became too high, and people started buying hay from neighboring states. Exporters who ordinarily would have been happy to pay premium prices for Pacific Northwest hay (said to be better, and more nutritious, than hay from other areas) began pinching pennies due to the economic crisis.

Hay producers are now faced with warehouses full of hay that they now have to sell at a steep discount. The Seattle Times reports that hay prices peaked at $230 per ton last summer, but have now fallen to $180-185 per ton. (This is still higher than 2007 prices, which averaged $130 per ton.)

Farther down the supply road, the prices are further being corrected by Pacific Northwest farmers, who are planting less hay this year in response to the glut. So it is not likely that the prices will fall much farther. A lack of supply this summer will keep prices up. And a drought in California has resulted in a huge loss of hay crops, which means that most likely, the Pacific Northwest will be exporting hay domestically this year as well.

The good news is that, if you own a horse, now is the time to buy hay!