Shift to sellers market has likely become the norm
May 15, 2008 10:04 AM,
By Aaron Kiess
Executive Director
California Alfalfa and Forage Association
Although CAFA is an advocacy group and not a marketing organization, we get phone calls and e-mails from people looking for hay in small or large quantities. In the last several months most of the people who contacted our office were from other countries and were looking for large quantities of hay.
Last Thanksgiving the phone in our home office rang at about 7 a.m. A hay buyer in England asked for prices on alfalfa and oat hay. We didn’t ask the destination, but a few days prior to the call we had received an e-mail from someone in England who was representing a Middle Eastern country.
You may have read that U.S. exporters are beginning to open up a market with China, an intriguing development given the potential of the world’s largest country. The prospect of a big export market opening up in the future came to mind when the National Ag Statistics Service (NASS) released its Prospective Plantings report in March. It raises the question as to how the dairy industry would be impacted given acreage trends in California and surrounding states that ship alfalfa into the Golden State.
California’s “all hay” acreage for 2008 is estimated to increase by only 10,000 acres. Alfalfa acreage won’t be broken out until NASS releases its June report, but it will be about the same as last year. The 1,620,000 acreage forecast for all hay in 2008 is 80,000 acres below 2006.
Most other Western states are holding steady or showing a small increase. Exceptions are Washington, down 40,000 acres, while both Montana and Wyoming are projected to increase by 50,000 acres. The latter two states normally don’t ship hay into California, but buyers were making purchases there last year and will likely do so this year.
In CAFA’s January newsletter, Chairman Philip Bowles of Bowles Farming, made an interesting observation. “The biggest shift I’ve seen this past year is that we now have a sellers market.” He went on to say, “We’re faced with a new set of questions. How can we turn away a valued, reliable customer in favor of a newcomer with ready cash and a higher offer?”
A number of profitable crop options, such as wheat, have taken up acreage that would normally be planted to alfalfa. But water, the No. 1 issue that won’t go away, means that the shift to a sellers market has likely become the norm.
Protecting farmland
In the upcoming June elections Californian’s can help protect farmland and other property rights thanks to the Farm Bureau and its partners — The Howard Jarvis Tax Payers Association, and California Alliance to Protect Private Property Rights. More than one million signatures were collected in the effort to place “The California Property Owners and Farmland Protection Act” on the statewide ballot.
The ballot initiative is a response to the U.S. Supreme Court’s shocking ruling in 2005 that allows governments to take private property and give it to private owners for development. The Protection Act on next month’s ballot will restore eminent domain to its original purpose for creating public projects such as, schools, roads, hospitals and water projects. For more information, please visit www.cfbf.com.
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