USDA’s October Crop Report included an update of hay production based on late September yield estimates. Relative to the department’s August estimates, total hay production declined in the nation (-1.4%), in Indiana (-4%), Illinois (-3.7%) and Ohio (-15.3%), but increased in Michigan (+4.7%) and Kentucky (+1.1%). Total production remained the same in Pennsylvania and Wisconsin.
U.S. alfalfa production remained steady with the August estimate. However, alfalfa production declined in Indiana (-9%), Illinois (-5.1%), Ohio (-19.6%) and Kentucky (-16%), but increased by 5.5% in Michigan. Continued dry weather in August and September resulted in further reductions in yields in the Eastern Corn Belt.
The August-to-October revisions point to even sharper reductions in the availability of high-quality alfalfa hay in the Eastern Corn Belt. This will result in higher prices than previously estimated if winter weather turns severe, resulting in increased demand for hay.
Increased precipitation in the Midwest and Southeast resulted in improved grazing during the fall. This has lessened the current demand for hay to be fed on pasture.
Alfalfa prices, as reported by USDA’s National Ag Statistics Service, have been stable since June, averaging $101 or $102 per ton since then.
Prices at hay auctions in northern Indiana increased sharply in mid-September. Prices for individual small lots reached $250 per ton before declining in late October to levels in the $150-200 range. Declining milk prices, stable grain prices resulting from larger-than-expected grain yields, and a focus on grain harvest have temporarily slowed the demand for hay. As winter weather begins, hay prices, especially for higher-quality dairy and horse hay, will again strengthen.