As milk prices recover slightly, sagging fortunes in the state’s dairy industry stay a major concern for California alfalfa producers, notes Jeff Merwin, ranch manager at S.H. Merwin & Sons, in Clarksburg.
“Milk prices have been coming up recently and getting in the ballpark of break-even,” says Merwin, who puts up 3 x 4 x 8’ large bales of alfalfa hay on 1,000 irrigated acres.
“But even at break-even levels, a lot of dairies will still struggle. Things have been so bad for the last couple of years, it’s going to take some time for them to work off their debt and get back on a sound financial footing. Since March, we’ve seen several fairly large dairies go out of business.”
Low milk prices help explain why the region’s alfalfa prices have run $15-30/ton lower than they were a year ago, he says. “Last year, we had one cutting that sold for $250/ton. Most extra-premium hay (with a test above 56% TDN) went for $240-250 in our area. This year, the best I’ve seen so far is $235/ton, and a fair amount is being sold around $200/ton.”
It’s hard to imagine alfalfa prices strengthening in the coming year, adds Merwin, who markets his hay through the San Joaquin Valley Hay Growers Association, a cooperative serving the state’s Central Valley.
“It may soften a little more, but, at the same time, the supply is still pretty short. I don’t see the price falling off a cliff, but who knows?”
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Weather conditions posed challenges for growers in other parts of California last week, according to the USDA’s California Department of Agriculture Market News report for June 21.
Bouts of heavy rain and severe weather kept many of the state’s far northern growers from fields. Yield losses from a late frost in May were also reported there.
In the southern third of the state, hot and dry conditions, coupled with strong winds, made baling difficult. “Some producers have been forced to put water on windrows in order to get hay up,” the report noted.
Wildfires have also been a problem throughout the state; nearly 50,000 acres had burned as of the first week of June. That’s nearly five times the state average.
To contact Merwin, call 916-799-1699 or email email@example.com.
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