Better late than never, USDA’s “data dump” arrived last Friday with news of 2018 hay production and inventories. Their Crop Production and Crop Production Annual Summary reports offered a glimpse of the current state of the forage industry and now give us a baseline as to how sensitive hay markets might be to various production pressures in 2019.
December hay stocks
The USDA makes its annual assessment of hay stocks in May and December. Recall that last May’s hay stocks estimate represented one of the largest year-over-year drops in recent history, declining by 36 percent and settling at about 15.7 million tons after last year’s winter-feeding season.
Last week, USDA pegged December 1, 2018, hay stocks at 79.06 million tons, down 6.4 percent from one year ago. This follows a nearly 12 percent drop in December hay stocks from 2016 to 2017. The December 1 hay inventory was the lowest total since 2012, a year that was characterized by one of the worst widespread droughts in history (see graph below).
As might be expected, individual states varied in the total amount and direction of hay inventory change (see table below). Of the major hay-producing states, the largest inventory reductions occurred in Wisconsin (down 34 percent), Texas (down 29.7 percent), California (down 24.3 percent), Minnesota (down 21.2 percent), Pennsylvania (down 21.2 percent), Arkansas (down 19.5 percent), and Missouri (down 17.6 percent).
States in the Northern Plains that were hit hard by drought in 2017 were successful in rebuilding hay stocks during 2018. North Dakota was up 23.1 percent, Montana gained 15.1 percent, and South Dakota had a more modest 3.9 percent boost.
North Carolina led all inventory gainers with a whopping 54.5 increase.
Bottom line: U.S. December 1 hay stocks have fallen nearly 18 percent (16.8 million tons) since 2016. This greatly impacts our ability to buffer weather-related production issues in the coming year. If winter feeding is above average because of a late spring, expect to see some regional shortages of hay until new crop can be made.
Harvested hay acres
USDA’s Annual Crop Production Annual Summary set the final 2018 harvested hay acreage at 52.8 million, which was only slightly higher than 2017 but still about 1 million acres less than 2016. The estimates only include acres that had at least one cutting harvested as dry hay.
Harvested acres of alfalfa and alfalfa-grass dry hay mixtures declined from 17 million in 2017 to 16.6 million in 2018. States with the largest harvested alfalfa acreage declines included Minnesota (minus 150,000 acres), Pennsylvania (minus 130,000), Iowa (minus 100,000), and New York (minus 100,000). Wisconsin was down 90,000 acres while California producers harvested 80,000 fewer acres in 2018. Montana led gainers with 250,000 more alfalfa acres harvested than 2017. They were followed by South Dakota with an additional 200,000 acres harvested. No other state had over 90,000 more acres.
When considering alfalfa acres harvested for all purposes (hay, haylage, and greenchop), South Dakota took over the top position from Wisconsin in 2018 with 1.8 million acres. The Badger State followed with 1.59 million acres while Idaho had the third largest acreage at nearly 1.1 million.
New alfalfa seedings
New seedings of alfalfa and alfalfa-grass mixtures in the U.S. during 2018 totaled 2.22 million acres. This was only slightly more than the 2.21 million acres in 2017 but down from the 2.27 million acres in 2016.
The average U.S. dry hay yield (all types) dropped from 2.43 tons per acre in 2017 to 2.34 tons per acre in 2018. For alfalfa and alfalfa-grass mixtures, the average yield declined from 3.28 tons per acre in 2017 to 3.17 tons per acre in 2018.
Arizona and California continued to dominate the average alfalfa yield category in 2018 notching 8.3 and 6.9 tons per acre, respectively.
The 2018 production of all dry hay types in the U.S. totaled 123.6 million tons, down 3.6 percent from 2017. Total alfalfa dry hay production declined by 5.7 percent to 52.6 million tons.
In some states, alfalfa hay production was cut significantly in 2018 compared to 2017. Included in this group were Minnesota (down 863,000 tons), Wisconsin (down 803,000 tons), California (down 482,000 tons), Pennsylvania (down 463,000 tons), Utah (down 460,000 tons), and Washington (down 453,000 tons). In some cases, the lower production was caused by acreage reductions, others by reduced yield, and some a combination of both relative to 2017.
Significant alfalfa production gainers in 2018 were easily led by South Dakota (up 1,050,000 tons). Other states whose production was up significantly included North Dakota (up 636,000 tons) and Montana (up 430,000 tons).
In summary . . .
Overall U.S. dry hay production hit its high-water mark in 1999 when 159.6 million tons were produced. Since that time, a slow but steady production decline has taken place, despite higher yields. The production in 2018 of 123.6 million tons about matches that of the mid-1960s. In fact, as recent as 2014, total dry hay production exceeded 140 million tons.
The USDA reports lend evidence that hay prices will not decline in 2019 and possibly may strengthen, especially with any kind of widespread weather event such as alfalfa (or grass) winterkill, excessive rainfall, or drought. Further, there is strong hope that the trade war with China will be resolved.
Other factors that will play into hay markets and supplies in 2019 include a shrinking national dairy herd, slowed growth in the beef herd, and a growing popularity in baleage production.