Hay growers harvested fewer alfalfa acres last year than in 2009, and the amount of hay stored on farms at the start of this winter was the lowest since 2006. Those are two main factors creating a bullish price outlook for the 2011 crop and beyond, says Matt Diersen, South Dakota State University Extension ag economist.

“I’m very optimistic about the price prospects for all classes of hay,” says Diersen.

Improved profitability is needed to make alfalfa more competitive with high-priced corn, soybeans and other crops, he adds. “If we don’t get some increase in alfalfa acres soon, we could have a really tight supply situation sometime in the next two years.”

Hay supplies are already tight, and Diersen expects strong demand over the next few months as more hay is added to livestock rations in place of higher-priced ingredients. In its January Crop Production report issued last week, USDA estimated Dec. 1, 2010, hay stocks at 102 million tons, down from 107 million tons on Dec. 1, 2009. Several major hay-producing states, including Kansas and Missouri, showed significant reductions compared with year-earlier levels. Only 11 states had higher stocks, with the largest percentage increases being in Michigan and Montana, where growers produced more hay last year than in 2009.

Total hay production increased slightly last year due to more acres harvested of hay other than alfalfa. The lower stocks were attributed in part to the fact that hay feeding started earlier last fall due to dry conditions in some states. Hay disappearance from May to December totaled 64.4 million tons compared to 62.5 million tons for the same period a year earlier.

USDA’s final estimate of the 2010 hay crop shows production of alfalfa and alfalfa mixtures at 67.9 million tons, down from 71 million tons in 2009. Acreage, at 19.9 million, was down from 21.2 million the previous year. The average yield was 3.40 tons/acre, a half-ton higher than in 2009 but below the agency’s earlier estimates.

Production of other hay totaled 77.65 million tons in 2010, up from 76.4 million tons in 2009. The average yield was 1.95 tons/acre from 39.9 million acres harvested.