Hay

Hay updates

Western hay production rises modestly amid slow export markets.

Western hay production increased slightly from 2023, reaching 24.05 million tons. This included modest gains for both alfalfa and other hay types. However, demand has been slow. Exporters and dairies are cautious about purchasing hay, recognizing that supply currently exceeds demand.

Montana - Hay production matched 2023 levels at 5.3 million tons, though yields varied widely by region. In eastern Montana, especially around Miles City, dryland hay stands were at 70% to 100% of last year’s levels. In contrast, Sydney and Glasgow reported better yields, with irrigated hay in good condition despite some first-cutting quality issues. Hay prices have remained steady across the state. Unusually warm weather has allowed livestock to stay on pasture longer, reducing feed costs. However, drought conditions are worsening, with 85% of the state abnormally dry. This could boost hay demand if dry conditions persist.

Pacific Northwest - Idaho saw a slight decline in hay production, with rain damage affecting at least one cutting for many producers. Challenges with voles and mice led to some fields being reseeded. Due to slow hay sales and prolonged low prices, growers are considering alternative crops. Additionally, concerns have been raised about invasive quagga mussels in the Snake River affecting irrigation equipment. In Washington, hay production remained consistent with 2023 levels at 3.3 million tons, while Oregon saw a slight increase in hay production.

Southwest - Hay production in California and Arizona increased by 8% year over year despite extreme heat. In California’s Imperial Valley, more than two-thirds of alfalfa, klein, and bermuda acres participated in a voluntary dry-up irrigation program (DIP). Program participants receive $300 per acre-foot of water saved by halting irrigation for 45 to 60 days in August and September. This program has ended, and payments are underway. Opinions vary on the number of cuttings lost during and after the conclusion of the program, with some fields in decent shape, others needing reseeding, and some with extensive damage. Many hope lower hay production will boost prices in the Imperial Valley and nearby markets, though the DIP program is unlikely to have a significant impact on hay supply.

Hay acreage has declined in the Southern San Joaquin Valley due to low profitability and water management initiatives, with few attractive alternatives. In Arizona, hay acres have also decreased due to water cutbacks and low prices, leading some growers to switch acres to cotton. Many feedyards in Arizona have put expansion plans on hold due to water and electricity concerns. Historically, hay from the areas of Blythe, California and Yuma, Arizona was shipped to northern California. That hay is now going to Texas, where strong demand has not translated to higher prices. General sentiment in the Southwest is that hay prices are lower than expected with heavy discounts on anything of lower quality. Forage markets remain soft with little movement, except for small bales, which show some promise.

Profitability

September 11, 2024

Hay (Alfalfa): Breakeven profitability - Neutral 12-month outlook
Hay (Timothy): Slightly profitable - Neutral 12-month outlook

Hay growers face mixed conditions. Weak export markets and weather-related yield issues pose challenges, but improving milk prices and a prolonged, cold winter could potentially boost hay prices and demand in the coming year.

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