As Midwestern corn-grain prices rise, so will Western alfalfa-hay demand and prices, says Seth Hoyt, market analyst and author of The Hoyt Report, a hay-market newsletter.

“It looks like dairies are going to use more alfalfa hay in the milk-cow rations and reduce the amount of corn because of the rising corn costs,” Hoyt says. “There are some strong indications that we’re going to see a stronger milk price in the months ahead. So, with that in mind, there will be more demand from dairies for alfalfa hay in the some areas of the West.”

Because many Western dairies weren’t able to afford the high prices for dairy-quality hay of last year – some averaged $300-330/ton – demand and prices have been lower. In central California in mid-July, for example, premium-supreme hay was selling for $235-250/ton at the stack, he says.

What dairies didn’t want to pay for was sold on the export market, says Hoyt.

In mid-July, premium-supreme alfalfa prices ranged around $200-210/ton in Utah, $180-200/ton in Idaho and $200/ton in Nevada, Hoyt says. Premium export hay in Washington State was in the $225-230 range.

“We’re right at this transition point where the market feels like it is getting strong in some areas and definitely steady in others,” he says.

He’s been surprised that the year-to-year price for fair-quality alfalfa dropped as much as it did in the northern valley of California. “We actually saw hay a month ago (mid-June) that was down as low as $150-160/ton for that quality. Today (mid-July), that market is more like $170-180/ton.

“And I was surprised the milk price in California went down further than I thought it would. It got to $13.65/cwt in May, which really put these dairymen in a bigger bind as far as having the money to pay for the hay.”

But the milk price looks to go higher in coming months, he says. “I can’t give any firm price, but it looks like it could push up into the $16-17/cwt range.”

For more information, visit The Hoyt Report.