Even with historically high hay prices, there’s only a “50-50 chance” alfalfa acreage in Idaho, which declined by 13% last year, will increase in 2012, according to University of Idaho ag economist Wilson Gray.

“We may see a rebound, but it won’t be a major one,” he says. Idaho growers typically seed alfalfa in the fall. “This past fall, we just didn’t see any new seeding of alfalfa going on to speak of.”

Dairy customers’ financial situations are a concern. “Dairy producers had a little better year in 2011, but now prices are slipping again. We’re getting back to the point where hay suppliers might be worried about getting paid for the alfalfa they deliver.”

Competition from other crops, a key factor causing last year’s acreage decline, is also likely to remain strong in the year ahead. Prices for dry, edible beans and sugar beets have been especially strong. On the other hand, the futures price for field corn has been softening in recent weeks. “If the corn price gets … weaker, it might make hay look a little better to some growers,” he says.

Gray can be contacted at 208-736-3622 or wgray@uidaho.edu.