Author of The Hoyt Report, providing hay market analysis and insight.
Some people I talk to from other parts of the country ask how can middle to lower quality alfalfa hay markets in California be going down given the record drought conditions. Two things that occurred last year answers that question. California dairies bought a tremendous amount of alfalfa hay in 2014 when milk prices were $21 to $23 cwt. and are currently carrying larger than normal amounts of old crop hay. They were not only concerned last year about hay availability due to drought, but they had a tax problem given record high milk prices and needed to spend money. Secondly, dairies were trying to avoid paying $290 to $300 delivered for dry cow alfalfa hay last summer by increasing the use of wheat straw and other by-product feeds in dry cow rations. Much of the reduced demand we are seeing today for Fair and Good quality alfalfa hay in California is because of these two events.