It’s shaping up as another year of high prices for alfalfa growers in southeastern New Mexico, says grower David Sterrett of Dexter. “There’s just no hay to be had in this area,” says Sterrett, who also serves as a board member of the New Mexico Hay Association. “Everything points to prices staying strong for at least the first several cuttings.”
Sterrett grows alfalfa on 2,000 acres of irrigated ground. He puts up most of his hay in 4 x 4 x 8’ square bales for the local dairy market. Small squares take 10-15% of his production. They weigh around 60 lbs and are sold to feed stores serving horse owners in eastern New Mexico and Texas.
A production shortfall in the region last year led to the current price runup. Alfalfa acreage was down because growers who had used up their five-year water allotments switched to cotton. Wind and drought also crimped production. In a typical year, Sterrett’s irrigated fields yield 7-8 tons/acre in six cuttings, but last year’s yield was closer to 6 tons/acre, he figures.
The low-supply situation then pushed prices to near-record heights. “At the start of last year, we were seeing a price of around $205/ton for the first couple of cuttings,” says Sterrett. “By the end of the year, we saw some hay going for over $400/ton.”
Area growers and local dairies have just started contracting for this year’s early cuttings. “The price I’ve been hearing is in that $275-300/ton range. Right now, everybody is kind of dragging their feet to see what develops.”
The late-season hay market will likely depend on weather in the dryland production areas of Kansas, Oklahoma and Texas. “If they get a lot of rain and have good crops, it could push our price down here a little bit.”
Low milk prices also bear watching. “Dairy producers aren’t making any money right now,” says Sterrett. “A lot of them are just scraping by. Something will have to change for them or hay prices will be going the other way.”
To contact Sterrett Farms, call 575-752-5813 or email sterfarms@leaco.net.