Federal Milk Marketing Order milk prices in Tulare, Calif., have gone from $14.21 per hundredweight (cwt.) in January to $16.94 per cwt. in July of this year, and yet quite a few dairies are still not actively buying alfalfa hay. The same story exists in the Magic Valley in Idaho, where demand from dairies for alfalfa hay is below normal. Some of this lack of demand is due to the lower supplies of high-testing alfalfa, and some dairies in both areas are waiting for later cuttings.
In the Magic Valley, there are dairies drawing a line on what they will pay for delivered high-quality hay. That price is lower than what most brokers can make work. We also know that dairies are feeding less alfalfa hay than they did five to 10 years ago, which keeps hay supplies on dairies larger than normal. Also, many dairies are still trying to climb out of the financial hole created when milk prices were depressed the past few years. Historically, when milk prices strengthen like they have the past few months, demand for alfalfa hay from dairies would improve.
Author of The Hoyt Report, providing hay market analysis and insight.
