USDA revised its 2012 production numbers upward for both alfalfa and other hay in its October Crop Production report released Oct. 11. But the newest numbers won’t do much to improve the overall low supply situation or take pressure off prices in months ahead, says Matt Diersen, ag economist with South Dakota State University Extension.
“We’re in a better situation than we were thinking we’d be in just a few months ago,” says Diersen. “But from a supply and logistics standpoint, it’s not that much better.”
For alfalfa and alfalfa mixtures, USDA forecasts total national production in 2012 at 55.6 million tons. That’s up 1% from the ag department’s Aug. 1 estimate, but down 15% from the 2011 figure. If USDA’s forecast is on target, 2012 production levels will be the lowest since 1953.
Based on Oct. 1 conditions, yield is expected to average 2.95 tons/acre, up 0.03 ton from August, but down 0.45 ton from last year’s figure. If realized, that would be the lowest U.S. yield since 1988. Harvested area is forecast at 18.8 million acres, down 2% from the 2011 total.
In the other hay category, USDA expects national production this year at 66.4 million tons, up 1% from both the August forecast and last year’s figure. That would be the second-lowest production level since 1990. Yields are expected to average 1.71 tons/acre, up 0.02 ton from August’s estimate, but down 0.1 ton from last year’s number. Harvested area is forecast at 38.8 million acres, up 6% from the 2011 acreage total.
October production totals appear not to have included hay baled on released Conservation Reserve Program (CRP) ground or from abandoned grain acres. “We could still see the numbers revised in December,” says Diersen.
The high cost of other protein sources, such as soybeans and soybean meal, is putting a floor under alfalfa prices. Even so, it’s unlikely that prices will rise much in the months ahead. “If the price of hay gets too much higher, livestock producers will ratchet down their hay use,” he says. “That will keep prices in check.”
But that doesn’t mean prices are likely to fall off much between now and the start of next year’s growing season. “The supply is low enough to keep the pressure on price,” says Diersen. “And if we don’t get some kind of a recovery in production next year, we’ll be looking at these high prices staying around for quite awhile.”