Hay

Hay updates

USDA Revises 2024 hay production estimates downward.

The USDA has revised its 2024 hay production estimates down by 7.6% nationally. Despite this, sluggish demand is likely to keep hay prices stable. Western states saw significant revisions, with harvested acre estimates overestimated by 11.67% (typically off by 2-3%). The largest reductions were in Montana (330,000 acres), Washington (100,000 acres), Arizona (30,000 acres), Idaho (30,000 acres), and Oregon (20,000 acres), which contradicts anecdotal regional information.

Western hay demand remains weak. Cow inventories are at their lowest in 76 years, and a mild winter has allowed ranchers to conserve hay. While cold weather could increase interest, many ranchers have ample supplies. Export demand is slow due to many international buyers having sufficient hay stocks, a strong U.S. dollar, and milk oversupply in China, the third-largest western hay export destination. Given these dynamics, hay markets were less reactive to potential tariffs than other commodity markets. Feed alternatives to alfalfa in the dairy industry are also tempering alfalfa demand, with prices for many alternatives historically low.

Profitability

December 11, 2024

Hay (Alfalfa): Breakeven profitability - Bearish 12-month outlook
Hay (Timothy): Breakeven profitability - Bullish 12-month outlook

Weak export markets and a strengthening U.S. dollar pose headwinds, but improving milk prices and a prolonged, cold winter could potentially boost domestic demand and support stronger prices in the coming year.

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