Continued strong export sales will likely lend support to alfalfa prices in the Pacific Northwest in 2013, according to a recent Hay Market Snapshot report from Northwest Farm Credit Services (NFCS).

On the upside, the report notes that strong demand for alfalfa in China is likely to continue in the year ahead. Expanding camel herds in the United Arab Emirates (UAE) are also likely to boost hay export sales.

But there are some potential bumps on the horizon as well. The weakening value of the Japanese yen could lead to lower hay demand from Japan in 2013. The report also warns that the export market is increasingly price-sensitive. “High shipping costs via Northwest ports may see California remain the growth leader in hay exports next year (2013).”

Along with exports, Northwestern hay growers will closely watch developments in the regional dairy sector. “The health of the dairy industry is threatened by the possibility of feed costs continuing to outpace milk prices,” reads the report. “Hay prices are likely to see downward pressure if dairy margins don’t improve, and hay growers could face higher risk of non-payment.”