By Rick Mooney
Editor, eHay Weekly

With the latest USDA acreage report showing a slight drop-off in hay acres in 2010 (see last week’s eHay Weekly), look for prices to strengthen some between now and the end of the year, says South Dakota State University Extension ag economist Matt Diersen.

According to the report, hay growers intend to harvest 59.7 million acres this year. Diersen notes that it would be the lowest harvested-acres total in the U.S. since 1994. By his calculations, the lower acreage numbers mean total production this year could be off by around two million tons from earlier production estimates. “That would be enough to make a difference on price as we move forward,” he says.

In particular, he adds, the declining acreage of alfalfa and alfalfa mixtures cited in the report bears close watching. With more-than-adequate moisture in many alfalfa-growing regions during the early part of the season, overall tonnage is likely to be at or above normal.

High-quality hay, though, could be in short supply. “Yields are likely to be okay,” says Diersen. “But the availability of protein will be of concern.”

With that in mind, he says hay buyers in need of high-quality hay may want to do their shopping early before prices head higher. On the flip side, growers who have been able to put up high-quality hay and have adequate storage available may want to hold off on selling until later in the year.

"There could be some opportunities regionally," he says. “Alfalfa acres are expected to be down significantly in many dairy states, including Minnesota, Pennsylvania and California.

“A lot depends on what happens with the weather from this point forward. But right now it looks like supplies – especially alfalfa – will be tighter than expected, and that should support better prices.”

To contact Diersen, phone 605-688-4864 or e-mail matthew.diersen@sdstate.edu.