With another round of winter storms to hit the West this weekend, the snowpack in the region is well above average. The snow water equivalent in most Western states sits at 150% over average or better. This will be very important for next year as we look to build up more supply to alleviate the record high prices. The vulnerable areas in the Great Basin and Central California are all looking better. As long as the storms continue, and don’t fizzle out like last year, production could improve.

In the Colorado River Basin, the Bureau of Reclamations is already working on the legal procedures to execute large cuts for next year. Every year, around 7 million acre-feet of water is released from Lake Powell to the water users downstream. The bureau is looking to achieve cuts in the 2 to 3 million acre-feet range.

Some forecasts predict that by July of next year, the water level at Lake Powell could drop below the outlets to the electrical turbines. With the mandatory cuts in Arizona and the voluntary ones from California, the bureau is halfway to meeting their reduction goals. A good winter would help the region, but multiple good ones are required to improve the outlook.

Given its location and long growing season, a good portion of the hay produced in the Desert Southwest is shipped out, heading east to Texas and beyond, or west to the Los Angeles region. Given the recent drought in Texas, and active monsoon season in Colorado, more hay from Arizona is going east. Different levels of water cuts in the region will have an impact on the supply and price of hay in the West. It will be important to watch how this situation plays out over the next 10 months.

Josh Callen

Author of The Hoyt Report, providing hay market analysis and insight. Callen is based in Twin Falls, Idaho.