Will export demand hold through fall?

Feedback over the last few weeks from export contacts has been that sales overseas have slowed. The harvest of local forage crops, concerns over prices, and trade relationships have been factors. Not being able to have customer visits has also slowed movement.

In China, concerns over the trade relationship is at the forefront of everyone’s mind. The exemption from the extra tariff is set to expire in mid-September, and the question is: Will it be renewed? Some contacts have had customers ask them to get shipments on the water now to ensure they arrive before mid-September. Others have said their customers are not concerned about it, given that the government refunded the extra tariff collected last time. They reason, either way, they will get their money back.

The dairy industry continues to grow in China, according to our sources. They will continue to need high-quality alfalfa hay and the U.S. is the best, most reliable source. One thing is for sure, the export market has helped hold prices up in many areas, especially earlier in the season. Given that current supplies of high-quality alfalfa hay are tight, good weather for the latter cuttings will be important going into winter. With many dairies and exporters buying hand-to-mouth, any disruptions to the last cutting may push prices higher through winter.