Milk prices, tariffs impacting hay market

In May of this year, it appeared that milk prices in California and Idaho were headed for $16 per hundredweight (cwt.) in August or September. That outlook has changed with the most recent estimate of July overbase milk price in California at just under $14 per cwt. This, along with the tariffs on U.S. alfalfa hay in China, has pushed alfalfa hay prices $10 to $15 per ton lower in Central California the past two weeks.

The downturn in the alfalfa hay market has prompted some growers in Central California to turn down bids, and some hay was moving to barns to sell later. Lower alfalfa hay acres in Central California and early indications pointing to lower alfalfa hay production are prompting some growers to hold alfalfa hay, gambling that news will improve in the months ahead. There is no way to know how long the tariffs will last, but there is a feeling by some in the hay industry in the West that alfalfa hay prices will improve when the tariffs end.

Seth Hoyt

Author of The Hoyt Report, providing hay market analysis and insight.