Warm weather reduced hay usage and prices last fall. But supplies remain tight, and prices are running well above year-ago levels.

Prices for high-quality alfalfa aren't as high in many areas as had been expected. But further increases are likely before the next growing season begins in most of the country.

In mid-December, the national average price of alfalfa hay was $102/ton, over $12/ton higher than the December 2000 price and nearly $30/ton higher than that of two years earlier.

After dry weather during the 2000 growing season led to limited supplies and higher prices, producers increased acres and production in 2001. Prices kept rising, though, peaking at $108/ton in October. Then mild weather and plentiful rains in many areas enabled livestock producers to utilize fall pastures, alleviating some demand pressure on stored forages.

Still, alfalfa hay prices were higher in December than in December 2000 in 22 of the 27 states reporting prices. Sharp increases were reported in Ohio, Michigan, Iowa, Wisconsin and most states in the Southern Plains and Western regions. Hay production declined in many of those states due to poor weather. However, prices also rose in California, despite higher hay production in that state.

Lower prices were reported in Nebraska and New York, where production increased sharply in 2002. But prices also declined in Minnesota, even though production declined.

On Jan. 11, USDA estimated 2001 all-hay production at 157 million tons, 3% more than was harvested in 2000. Most of the increase was due to a 6% increase in acreage, primarily of hay other than alfalfa.

Hay production increased in 17 states and decreased in 29. It increased in the Plains and Southeastern regions, and declined across the Corn Belt and in some Western and East Coast states.

In Texas, the top hay-producing state, production increased 22% due to a nearly 25% increase in acreage. Among the other leading states, production increased 24% in South Dakota, 4% in California, 22% in Kansas, 18% in Missouri and 25% in Nebraska. But it dropped 9% in Minnesota.

Alfalfa production, at 80.3 million tons, was about the same as in 2000. It increased in 17 states and declined in 24 states last year. Production of hay other than alfalfa increased 7%. Acreage harvested was 8% higher; yield was slightly lower.

Last year's production gains failed to offset the sharp decline in May 1, 2001, hay stocks. So supplies of available hay going into last fall were about 2% below the year-earlier amount. Then at least 10% less hay was fed across the country during the fall, resulting in higher Dec. 1 hay stocks.

Stocks of hay on farms and ranches totaled 111 million tons on that date, 5% more than the year-earlier amount and the largest since 1998. Stocks increased along the Gulf Coast and in the Plains, and declined in the Eastern Corn Belt and the East Coast.

Prices for premium-quality alfalfa hay will continue to increase due to limited supplies and high dairy cattle and horse numbers in the eastern half of the U.S.

If mild weather continues, this year's May 1 hay stocks may be up. And hay supplies for next winter may further increase because of larger 2002 production. Growers seeded 6% more acres of alfalfa in 2001 than in 2000. Those acres will be harvested this year.

The number of acres seeded to alfalfa last year increased in California, Colorado, Kansas, Nebraska, North Dakota, Oklahoma and South Dakota. Declines were reported in many of the Corn Belt states, including Indiana, Iowa, Kentucky, Michigan, Minnesota, Ohio and Pennsylvania.