Dairy markets and uncertainty pressure hay markets |
| By Josh Callen |
|
Josh Callen |
|
Widespread trading on new-crop alfalfa finally got underway this week in Central California after being delayed by rain. The rain delay has caused some alfalfa hay to mature beyond optimal quality. This was especially evident in the southern San Joaquin Valley, a region where first cutting normally is early but this year experienced some of the heaviest rainfall. Pricing on new crop alfalfa delivered to Central California dairies has started the year $10 to $20 per ton lower than a year ago. Dairies are in survival mode, buying very small lots at a time. They are working to lower their feed cost and preserve equity as some wait for milk price insurance or USDA relief payments. On the export side, contacts report demand in China remains good, but the shipping side remains a challenge. Fewer empty containers are available, and carriers continue to void sailings into June. Export buyers across the West have been very cautious on contracting any new crop. The amount of alfalfa hay contracts reported by our contacts is down 85% compared to a year ago. While growers cannot control the demand for their alfalfa hay, they can control how well stacks are protected. Looking back at recent down years in the hay market, well-protected stacks are easier to move, and if you normally sell to dairies and the demand is not as strong, it keeps the export market open as an option. First cutting of alfalfa hay is starting in the southern Columbia Basin of Washington, and growers in southwest Idaho should be starting in the next week to 10 days. |
