Knowledgeable market watchers have been predicting for months that U.S. hay acreage would drop this year. And from that standpoint, the March Prospective Plantings report released by USDA on March 31 didn’t disappoint.

U.S. producers plan to harvest 59 million acres of all hay in 2011, down 1% from the year-ago figure. If the forecast holds up, it would be the fourth-lowest harvested-hay-acreage total on record.

“Given the reports I’ve been reading for the past several months, I really expected the acreage to be lower,” says University of Wisconsin Extension educator Ken Barnett, who compiles the Weekly Hay Market Demand and Price Report for the Upper Midwest. “One percent doesn’t seem like that much, especially given that 2010 was a pretty tough year for hay production in many parts of the country.”

Barnett was especially surprised at the acreage reduction forecast for the Midwest. All-hay acreage is likely to decline 4% in Iowa, 3% in Nebraska and South Dakota, 2% in North Dakota and 1% in Missouri. Hay acreage in Illinois is likely to remain about the same, and Wisconsin’s acreage is expected to increase by 2%.

“It seems like all we heard this winter was how many producers were going to be pulling hay acres out of production to plant corn and other grain crops in order to take advantage of higher grain prices.”

While last week’s report covered expectations for all hay rather than breaking out numbers for specific types of hay, Barnett says the oats segment offered a hint that alfalfa acreage is also likely to drop in many parts of the country. The area seeded to oats is expected to total 2.8 million acres, down 10% from last year’s total and the lowest on record. “If you assume that most people are planting oats as a cover crop for alfalfa, it tells you that alfalfa acres could be down, not just for this year, but for several years to come.”

According to the report, record-low oat acreage is expected in 20 of 31 reporting states. The largest expected decrease is in Wisconsin, where producers plan to plant 70,000 fewer acres this year. Notable acreage reductions are also expected in North Dakota, South Dakota and Minnesota.