Limited supplies are keeping the pressure on high-quality alfalfa-hay prices throughout most of the West. Industry insiders say that while good end-of-year cuttings could offset some of the shortfall, prices aren’t likely to drop significantly heading into winter months.
In central California, early 2013 cuttings produced less high-test alfalfa hay than normal. Wet weather and insect problems, causing growers to delay cuttings, were to blame, reports Norman Beach,vice president of the San Joaquin Valley Hay Growers Association in Tracy. “There was a lot of over-mature hay put up,” he says.
Top-end alfalfa (TDN of 58% or above) has been fetching $300-305/ton, delivered, in recent weeks. Feeder-quality hay has been selling for around $100/ton less.
“It’s pretty unusual to have that large of a price spread,” says Beach. “It’s usually more like $40/ton. As much as anything, it shows just how tight things are for the real high-quality hay.”
The supply situation could improve now as fall cuttings get underway. “If we start getting a lot of test hay here at the end of the season, who knows where prices might head?”
Grain prices, of course, will likely also play a big role in determining where hay prices eventually settle, he says. “If the bottom were to drop out of the corn market, hay prices would fall off accordingly.”
A production shortfall brought on by a season-long drought is likewise helping keep a floor under top-end alfalfa-hay prices in western Nevada, reports Jon Hill, manager of the Nevada Hay Growers Association, a cooperative in Yerington.
Things could have been worse on the production front. “At the start of the year, we were anticipating production for our growers might be off by 20,000 tons from normal,” he says. “But now it’s looking more like it will be somewhere around 10,000 tons.” The cooperative typically markets 90,000 tons of hay, mostly alfalfa, annually.
Currently, high-test, conventional alfalfa hay in the region is bringing $220-250/ton at the stack. For organic alfalfa, the price range is $210-270/ton.
The market could be near its peak, Hill adds. “The price of milk is at or below breakeven levels for a lot of dairy producers out here. Dairy producers aren’t going to pay so much for hay that they end up going out of business.”
An extremely hot summer has also stymied alfalfa production and led to relatively low stocks of premium-supreme alfalfa hay in Idaho, reports Glenn Shewmaker, forage specialist with University of Idaho Extension. “We set a record for daytime highs over 90 degrees,” he notes. “Even in places where irrigation has been adequate, it’s been so hot that alfalfa plants have been stressed.”
That’s reduced digestibility, he adds. “The hot weather increases lignin (a polymer in a plant’s cell wall that keeps it upright). As a result, we’re seeing some very pretty, nice green fine-stemmed hay that just doesn’t feed very well.”
Top-quality hay, Shewmaker reports, has been selling for $230/ton at the stack in most parts of the state. That’s up $10-20/ton since early summer.
A stretch of monsoonal moisture in recent weeks could mean more irrigation water will be available for the remaining one or two fall cuttings. Even so, “there’s enough of a shortage of premium-supreme hay that prices aren’t likely to fall very far,” he says.
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In New Mexico, strong demand and lower-than-average production in 2013 have kept prices on the high side in much of the state, reports Doug Whitney, a Roswell hay grower and past president of the New Mexico Hay Association.
“The hay supply as a whole is pretty tight, mostly because there’s been such a deficit of feed in the central Southwest due to the last three years of drought,” he says. “This is something that doesn’t fix overnight.”
While areas of the state received good amounts of moisture during the recently completed monsoon season, his area missed out. “A month ago, areas on all sides of us got 7” of rain. We got 4/10 of an inch. Since 2010, we’ve totaled maybe 13-14” or so here at the farm.”
The lack of moisture has translated into a yield deficit of about 20% for the last three years on Whitney’s 700 acres of alfalfa. “We’re 100% irrigated (well water) here. But it’s hard to get anything to flourish without a little help from Mother Nature.”
Limited hay production in parts of Colorado, Kansas and Texas could also squeeze available supplies for local dairies, the grower says. “A lot of hay from those areas usually comes into the dairies here. This year, we’re not seeing as much of that.”
The only thing keeping hay prices somewhat in check, says Whitney, is the stressed cash flow that many dairies in the region face. “The way it looks now, that might not get corrected until next year. A couple of dairies in the valley are closing temporarily in hopes of balancing the hay and corn supply situation until better times happen.Some dairies that used to buy hay or silage by the full barn or pit are now buying it piecemeal.”
Supreme-premium alfalfa hay in the Roswell area is fetching $250-290/ton at the stack, about $40/ton lower than it cost a year ago. But Whitney believes there’s still plenty of room for hay prices to push upwards in the months ahead. “It will take awhile before the quantity of feedstuffs returns to a regular level. Until that happens, hay prices aren’t going to come down.”
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