U.S. hay supplies will increase this year and prices will drop, remaining well below their 2008 peaks throughout the decade, a new report predicts.

The U.S. Baseline Briefing Book, a 66-page report from the University of Missouri Food and Agricultural Policy Research Institute (FAPRI), makes long-term supply and price projections for various crops. It projects modest increases in hay production and stocks this year, with production and usage remaining roughly flat for the next several years. Acreage, estimated at about 60 million for 2010, is expected to drop slowly in ensuing years, reaching 59 million acres in 2019.

The all-hay average price is put at $114.95/ton for the 2009-10 marketing year, which ends in April. FAPRI expects it to drop to $110.84 in the next marketing year, then continue to drop until it hits $108.94 in 2014-15. It’s projected to rise in ensuing years, reaching $119.61 in 2019-20. Alfalfa prices will average $124.41/ton in the 2010 calendar year, according to FAPRI, then drop in each of the next five years, bottoming at $115.14 in 2015 before rising again.

“Hay markets are more fragmented than markets for most other agricultural commodities, so trends in national average prices may not reflect local conditions,” the report adds.