“We had some pretty severe drought conditions in 2012 and 2013 across Oklahoma and Texas, and prices were getting pretty high,” said James Johanson, hay specialist with USDA’s National Agricultural Statistics Service (NASS).

Those high prices were due to record-low hay stocks. In May 2013, all-hay stocks of 14.156 million tons hit their lowest level since recordkeeping began in 1950. Since that point, stocks have been building, and this year’s robust yields and production will likely only add to the stockpiles.

In the 65 years since NASS has been tracking all-hay stocks, about one-third of the time May 1 stocks were higher than they were this past May, when stocks were 24.517 million tons, noted Johanson. The highest May stocks ever were in 1980 at 33.192 million tons.

“California is still in a drought situation, but east of the Rockies, conditions have been good,” Johanson noted. “This year, hay yield and production have done pretty well. There’s a good supply overall.”

Big Crops

According to USDA’s latest Crop Production report, output of alfalfa and alfalfa mixtures in 2015 is expected to be up nearly 3% from last year at 62.2 million tons. Alfalfa production in California, a state still gripped by drought, is down more than 6% to 5.33 million tons.

Alfalfa production across the Midwest and Upper Midwest is mostly higher with the exception of Missouri, where output is projected to be 13% lower than in 2014; Indiana, where estimates are for a 2.5% drop; and Minnesota, down an estimated 1.3%.

Production of all hay other than alfalfa will also be higher this year, according to USDA. Projected output of other hay this year at nearly 79.2 million tons is up about 1% from last year. California again is reporting a large decline in production of nearly 4% to 1.365 million tons. Across the Midwest and Upper Midwest, output of other hay is mixed, with Missouri and Minnesota posting large increases.

Hay quality east of the Rockies has been good. “The final cutting of hay may have produced the best hay of the year,” stated the Iowa Hay report. “Growers reported that the long dry spell resulted in hay that was both cut and dried with no spoilage.” Nearby states reported similar growing conditions.

Hay Prices Trend Lower

“Over the course of the last year, alfalfa and other hay prices have declined pretty readily across the country,” Johanson said.

Alfalfa and hay prices are highly variable across the country depending on variety and quality. The national all-hay price tracked by USDA declined from $181 per ton in August 2014 to $145 in August 2015. Despite severe drought, California’s all-hay price has also fallen, from $231 per ton in August 2014 to $157 per ton this past August.

Much of this year’s decline in U.S. hay prices can be attributed the multi-year rebound in supply as well as a decrease in demand from a smaller national beef herd.

“A lot of things have been driving California hay prices lower—milk prices, strength in the dollar, slipping corn prices, and almond hulls that are now making it into the ration,” said Jonathan Gittlein, reporter with Hay Market News.

By: Fran Howard, AgWeb.com Contributing Writer
Source: AgWeb.com