Erratic weather conditions — wet, cold and searing heat —have had a huge impact on the state's alfalfa crop. Experts predict yields at 6.7 tons per acre, the lowest level since the El Niño year of 1998.

California hay growers are fretting about the lack of high-test hay for milk cows while stacks of medium- to low-test hay have piled up. The price spread in the San JoaquinValley between the top and bottom dairy qualities is wide.   According to the USDA’s Market News, on Oct. 6, supreme alfalfa was selling for $178 to $198 per ton delivered and fair quality hay for dry cows was selling for $115 to $125.

“It has been a stare down with the dairies,” said Orland hay grower Lee McDaniel. “Dairies don't want to or can't pay last year's prices for high-test hay. There's too much hay in the mid- to lower-quality range and growers don't want to sell for lower prices.”

It appears the stalemate on hay purchases may be easing. USDA reports that 44,536 tons were sold in California the week of Oct. 6 and 57,135 tons were sold the previous week. That compares to 28,354 tons sold the previous year during the same period. Year-to-date sales totaled 1.7 million tons by Oct. 6, compared to 1.6 million tons in 2005.

Adding to the dairy/hay equation is the fact that lower milk prices have slowed dairy purchases. Also, dairy operators are not building on-farm hay inventories, and hot weather led to a decline in hay consumption because cows eat less and produce less milk.

Market observers say dairy operators are waiting for hay prices to settle before making significant purchases. The hope for improved milk, cheese and butter markets may not materialize, says Seth Hoyt, senior economist with the National Agricultural Statistics Service.

"As California alfalfa hay growers discovered in 2003, despite tight supplies of high-quality alfalfa hay, when your main customers are financially strapped, they resist higher asking prices," Hoyt said.

San JoaquinCounty hay grower Mike Robinson said the hay market is off because there's no test hay right now and because the local crop was damaged by spring and summer weather conditions.

"Since the dairy market dictates the price, essentially there is no market for hay right now," he said. "Right now we're finishing up our fifth cutting and looking toward the sixth when we should begin getting higher test hay."

Robinson said fortunately hay is a commodity that can be stored and brought out later when conditions are right for better prices.

"Winter hay coming out of the barn usually goes up a minimum of $20 to $25 a ton, depending on the availability and quantity on the market," Robinson said. "Last year hay was in such high demand there was very little hay put into the barn. Hay tested pretty much all year last year and was taken away by the dairymen. That's not the case this year."

A combination of extremely rainy conditions, waterlogged fields, nitrogen deficiencies in January and February, and sudden heat in May and July added up to a difficult year.

To read the full article from the California Farm Bureau, go to: http://www.cfbf.com/agalert/AgAlertStory.cfm?ID=692&ck=E555EBE0CE426F7F9B2BEF0706315E0C

For more information about the outlook for the 2006 California hay market, visit usda.mannlib.cornell.edu. Annual, weekly and monthly reports of the state's and other hay markets can be found at www.ams.usda.gov.

CaliforniaFarm Bureau Federation