“I know some guys from Texas who were buying (alfalfa hay) from Nevada,” Ahlem says.
Improvement in sight
Hay prices should ease this year for producers in the Western states, according to Hoyt.
While lower hay prices might be viewed with optimism, there is also an element of pessimism in Hoyt’s prediction. One of the reasons why hay prices will decline is because dairy producers won’t be able to afford as much.
“I have lowered prices based on what’s going on in the dairy industry,” Hoyt said. “Right now, we are just producing too much milk,” he said, which is causing lower milk prices.
When dairy farmers experience economic difficulty, it becomes a problem for hay growers. Dairies are the main customer for hay in the West, and “a lot of dairies are going into a negative cash flow situation,” he said. Hoyt now estimates the price of first-cutting supreme alfalfa dairy hay, delivered, will be $260 to $270 per ton in central California this year and $210 to $220 per ton in Idaho. Again, that is a first-cutting hay price and not intended to cover the entire growing season.
Hoyt projects that hay acres in states such as California, Idaho, Nevada and Arizona will be up 3 to 5 percent this year compared to 2011. Yet, even with increased acres, there won’t be an abundance of hay, he adds.
A weakening La Nina weather pattern in the Pacific Ocean should help ease drought conditions and boost hay supplies.
Producers would welcome any improvement.
As we have seen, there are some producers who will ship alfalfa from 1,400 miles away, while others simply say, “enough is enough.”