As we approach the end of fall and the beginning of a new year, alfalfa hay growers in the West are looking at mixed signals on what demand will be like in 2018. On the negative side, milk price projections are not very encouraging. Higher milk production and larger supplies of dairy products worldwide and the resulting softer prices are keeping downward pressure on the U.S. milk price outlook, particularly the first half of 2018. Demand for alfalfa hay from dairies in the West during 2017 was below normal for much of the season.
On the positive side, export companies in the West feel that sales of alfalfa hay to China and Saudi Arabia in 2018 will continue to grow. As Saudi Arabia continues to reduce water for alfalfa hay production, more hay will need to be imported into the country for dairy cows. Many dairies in China still look to the western U.S. as a source of quality alfalfa hay.