With supplies expected to be short due to drought, hay buyers in California are scrambling to put up supplies of new crop. Here, one of Jeff Merwin’s employees mows hay to be made into 3 x 4 x 8’ large bales.
As alfalfa growers begin taking first cuttings in California’s Central Valley, prices are extremely strong. Hay buyers are buying high-quality product at a rapid clip, reports Norman Beach, vice-president of the San Joaquin Valley Hay Growers Association in Tracy.
“I have a lot more buyers than I have hay available right now,” says Beach. “Everyone is concerned that they’re not going to have enough hay because of the drought situation.”
Top-end fancy hay in the region is going for $350/ton delivered. That’s roughly $80/ton higher than prices of a year ago. “Everybody wants first cutting this year,” says Beach. “Usually, it doesn’t move this fast at prices this high.”
Lower-quality hay is also at surprisingly high prices. Hay that’s 15-20% weeds is selling for “north of $300/ton on a stack-by-stack basis.”
And there might be room for prices to move still higher. “As short as the supply looks right now, I wouldn’t be surprised,” says Beach.
Typically, alfalfa growers in the region harvest up to eight cuttings a season. But with water in short supply in parts of the state this year, some growers may forego several cuttings. “It’s hard to get a feel for the overall picture right now,” says Beach. “Most growers in the northern and central parts of the Central Valley should have the water they need.
“But from the Delta south, some growers may only take one or two cuttings and then have to use their water for growing other crops they have under contract. We’re hoping that these higher prices might convince a few more growers to keep more of their ground in hay. But a lot depends on what kind of other crop obligations they have.”
Grower Jeff Merwin puts up alfalfa on 1,000 irrigated acres near Clarksburg. He says growers in his irrigation district who rely on surface water from the Sacramento River should have enough water to get through the end of summer.
“We were pretty dry through the fall and winter and the hay crop was completely dormant,” says Merwin, who is ranch manager at S.H. Merwin & Sons. “But then we had some good rains at the end of February and in early March. Up to this point, we haven’t had any cutbacks (on water allotments). Once we get into the fall and next year, though, it’s anybody’s guess what will happen. It will all be up to Mother Nature.”
In the meantime, he expects alfalfa prices to remain strong through the next several months at least. “There wasn’t a large carryover of hay and the dairy industry has recovered some. Dairy producers should be in a better position to build up some feed inventories rather than buying hand to mouth like they have the last couple of years. The combination of a short supply and strong demand is good news from a seller’s standpoint.”