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Hay market likely to continue at current levels

Sep 5, 2007 3:21 PM, By Aaron Kiess
Executive Director California Alfalfa and Forage Association

Before last month’s first yield survey for 2007 was released, we wondered if production would be as high as some observers were recently predicting. Early this year we heard from a number of growers who, for one reason or another, were looking at lower yields to start the season.

When survey results were released they showed a 6 percent increase for California vs. 2006. The seasonal forecast of 7.2 tons per acre is the highest level in 10 years. One of the more interesting developments in the 2007 hay market is the low price spread that has prompted growers to shoot for tonnage instead of aiming for maximum quality this summer.

Writing in the August issue of CAFA News, Seth Hoyt, senior economist for the National Agricultural Statistics Service pointed out that “the price spread between the top and bottom of the alfalfa hay market is at a record low in California. For the week ending August 10, supreme quality alfalfa hay delivered to Tulare dairies ranged from $213 to $215 per ton.” That was only $20 to $30 per ton higher than fair quality alfalfa. Growers in central and northern California were going for tonnage and, said Hoyt, “there were many reports of two tons per acre, with some growers reporting up to three tons per acre.”

As pointed out in the July issue of CAFA News, dairymen were feeding wheat straw in total mixed rations (TMRs). In addition, there was a big jump in sudangrass acreage planted by dairymen who are feeding the forage to dry cows. According to one of Hoyt’s sources, “Fair quality alfalfa hay prices would be even higher if dairies were not feeding wheat straw in TMRs and other types of hay such as sudan for dry cows.”

Unfortunately for dairies, there’s nothing on the horizon to change the supply-side. States that ship hay into California, such as Idaho, Nevada and Utah, have seen yields drop due to dry weather and a cold spell in April. Hoyt reported that hay buyers from several western states and the Midwest were “competing for alfalfa hay in Montana.”

RR Dilemma

By the time this column appears the regulations that have riled Roundup Ready (RR) alfalfa growers will be settled and hopefully common sense will prevail. In July the USDA-Animal & Plant Health Inspection Service (APHIS) issued an administrative order to comply with the May 3 permanent injunction issued by the U.S. District Court for Northern California.

On Aug. 9, CAFA took part in a conference call with USDA-APHIS and expressed a number of concerns and practical options for handling RR alfalfa. The USDA-APHIS representatives were open to suggested changes that they planned to submit to the judge who issued the injunction. Of the different regulations APHIS implemented in July, the one that raised the biggest obstacle was the requirement to tag all bales of RR alfalfa.

While the bale tagging issue was being discussed, Monsanto filed an appeal on Aug. 13 that will hopefully lift the May 3 injunction. Other crops such as soybeans and corn are benefiting from RR technology. Some 90 percent of U.S. soybean acreage and 73 percent of corn are planted to RR varieties. Singling out alfalfa, as was done in May of this year, is a travesty that needs to be corrected.

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