Ervin Gara III and Dennis Brown know they could make more money growing other crops this year, but they're increasing their alfalfa acres instead.

Gara, who owns Wyoming Haybusters, Torrington, WY, is adding 1,200 acres, bringing his total to 4,500. And Brown, Milton, ND, will add 100 acres to total 500. Both foresee continued strong hay demand and expect prices to be even higher than they were for the 2007 crop.

“I've got more customers than I have hay, and that's one reason we're increasing,” says Gara.

“For right now, anybody who has decent alfalfa is kind of in the driver's seat,” adds Brown.

While they're certainly not the only hay growers ramping up their acreage, Gara and Brown are bucking the national trend. In its March 31 Prospective Plantings report, USDA said growers expect to harvest 60.6 million acres of all types of hay, 2% fewer than in 2007.

Acreage is expected to drop throughout most of the Great Plains, Southwest and even the Southeast, where hay supplies are critically short due to last year's drought. Acreage increases, mostly minor, are projected for most states in the northern Great Plains, Western Mountain regions and Northeast.

USDA's total hay acreage estimate was a bit of a surprise to Matt Diersen, South Dakota State University ag economist.

“It's at the low end of what I would have thrown out as a potential acre number,” says Diersen. “Given the high hay prices, I wouldn't have expected much of a decline.”

He points out that the 60.6 million acres are the lowest harvest intentions since 1999, when hay stocks were high and prices low, the opposite of the current scenario.

In reviewing USDA's state-by-state numbers, he notes that the biggest expected acreage declines tend to be in Corn Belt states, where growers have the flexibility to shift hay acres to corn, soybeans or wheat. Most projected acreage gains are in strong dairy states with very high hay prices.

“So you've got a financial incentive to increase or maintain hay acres in those states,” he says. “That tells me supplies are tight, but the price has come up enough to encourage the production that might be warranted.”

Hay supplies are tight almost everywhere, but, overall, probably not quite as tight as they were a year ago. Stocks of hay stored on U.S. farms totaled 104 million tons last Dec. 1, 8% more than the year-earlier amount. Assuming wintertime usage was at roughly the same level as in recent winters, Diersen expects May 1 hay stocks to be slightly higher than they were last year, when stocks were the lowest since 1950.

If the national average yield comes in about normal, and livestock numbers don't change much, he figures hay production and consumption will match up well in 2008.

“If I had to guess, I'd say the year from a price standpoint will play out much like 2006,” he says. “Prices were very high. Not as high as in 2007, but very high.”

Much will depend on yield, however. “If you start painting a pretty bad drought scenario, that would be scary,” says Diersen.

Gara and Brown are expanding their hay production when neighbors are cutting back or getting out. Gara's No. 1 client, Dyecrest Dairy, Fort Collins, CO, bought 1,000 acres in southeastern Wyoming and hired him to grow hay on it. That accounts for most of his acreage increase, but he's also adding 200 acres of his own.

He says a lot of growers in his area plan to take two alfalfa cuttings, kill the crop with Roundup and plant wheat. He thought about doing some of that himself — wheat prices are high and the crop is easy and relatively inexpensive to grow. In particular, he's concerned about the large amount of high-priced fuel needed for hay production.

But he'll stick with alfalfa.

“I guess I'm a one-crop person,” says Gara. “I know how to grow hay, and I just rely on that.”

Brown, who rotates wheat and alfalfa, thought about going heavier on wheat this year and decided against it. Demand for dairy-quality hay has been strong, in part because his neighbors have switched to other crops. He says there used to be several growers with 8,000 total acres of alfalfa in his northeastern North Dakota county, and he's the only one left.

He could have sold all his hay by Jan. 1 this year, and is optimistic that demand for the 2008 crop will be even higher.

“The only thing that worries me right now is the price of milk,” says Brown. “Once milk starts heading south on us, these dairies can only afford to put so much in their rations, and they're obviously going to be looking for cheaper alternatives.”

Gara can be contacted at 307-532-1746; Brown, at 701-496-3565.

Expected Hay Acreage By State
State 2007 2008 2008/07
(Thousands Of Acres) (%)
AL 800 780 98
AZ 290 285 98
AR 1,580 1,450 92
CA 1,610 1,620 101
CO 1,550 1,450 94
CT 61 60 98
DE 15 15 100
FL 300 250 83
GA 670 600 90
ID 1,500 1,500 100
IL 680 680 100
IN 660 650 98
IA 1,480 1,500 101
KS 2,900 2,800 97
KY 2,700 2,750 102
LA 400 420 105
ME 149 150 101
MD 215 205 95
MA 82 80 98
MI 1,080 1,080 100
MN 1,880 1,900 101
MS 850 750 88
MO 4,050 4,000 99
MT 2,550 2,600 102
NE 2,650 2,500 94
NV 460 470 102
NH 46 50 109
NJ 115 110 96
NM 350 310 89
NY 1,360 1,370 101
NC 699 720 103
ND 2,780 2,900 104
OH 1,150 1,200 104
OK 3,180 3,130 98
OR 1,000 1,010 101
PA 1,800 1,850 103
RI 8 8 100
SC 330 350 106
SD 3,800 3,500 92
TN 1,725 1,750 101
TX 5,340 4,950 93
UT 710 700 99
VT 220 230 105
VA 1,340 1,340 100
WA 790 750 95
WV 600 610 102
WI 2,020 2,050 101
WY 1,100 1,150 105
U.S. 61,625 60,583 98