A second straight year of reduced alfalfa acres in the region should translate into another good year for hay prices in Washington’s mid-Columbia Basin, says Shawn Clausen, owner of Stockrose Farm near Warden.

“A lot of guys took alfalfa acres out last year to plant wheat, corn and other crops, and it looks like that will be the case again this year,” says Clausen, Washington State Hay Growers Association board member and past president. “I don’t know if I’d go as far as saying supplies are going to be extremely tight, but I don’t think there’s going to be any excess.”

As of the end of May, buyers in the region were paying $220-230/ton at the stack for this year’s first cutting. “That’s about where we started last year,” he says. “From there, it moved up to $250/ton at the stack.”

Continued export strength is also firming up regional alfalfa prices. While there’s been buyer resistance in the United Arab Emirates due mostly to high U.S. prices, demand is brisk in Asia, he notes.

“We grow an excellent product that they (Asian buyers) really like,” says Clausen, who sold roughly 90% of production from his 2,000 alfalfa acres for export in 2011. “The U.S. dollar is weak right now, and the Japanese yen is as strong as it’s ever been. That’s good news for exporters.”

A major wild card for regional alfalfa prices in 2012: weakness in the dairy sector, he warns. “There is a danger that we’ll price ourselves out of the market. Milk prices are dropping, and a lot of dairy producers are struggling. They just can’t justify buying top-dollar hay. They’re getting creative and feeding other things in their rations in place of alfalfa.”

To contact Clausen, call 509-750-9822 or email shawn@smwireless.net.