The new year usually brings some optimism, even after a highly disappointing season. Conversations with growers and industry sources have indicated that there is reason to be optimistic about the prospects of the alfalfa hay market in 2004. Additionally, the bright spots in 2003 — sudangrass hay for export and orchardgrass and alfalfa/grass mixes — appear to be headed for another good year.
A number of factors point to alfalfa acreage remaining about the same or, perhaps more likely, taking a dip this year as growers have more crop options that have improved market outlooks.
The first official indicator of hay acreage trends will occur in late March when the USDA releases its Planting Intentions report. However, a rebound for cotton prices and speculation that contract prices for processing tomatoes will strengthen in 2004 are fueling speculation that alfalfa acreage will probably be less than in 2003. Water transfers that are taking alfalfa out of production in southern California are also adding to the speculation that there could be a downward trend in acreage.
Last year at this time, industry sources were predicting that more interest in alternative crops, especially cotton, plus a reduction in alfalfa production in the Imperial Valley, would result in fewer acres. The prediction was borne out when the USDA issued its June report and forecast that California growers would harvest 1.09 millions acres of alfalfa in 2003, a reduction of 50,000 acres vs. 2002.
Also, there appears to be a general consensus when it comes to California hay stocks being lower than last year, at least for milk-cow quality hay. On Dec. 1 of 2002, all hay stocks on hand were 274,000 tons above the same period the previous year. This year, however, there are indications that some California dairies will need milk cow hay by March or April, which is earlier than in 2003. It should be a welcome development for growers in the southern California desert who need a strong market for early cuttings after a disappointing 2003 season.
The outlook for 2004, of course, depends heavily on California's dairy industry continuing its recovery from low milk prices and a rebound in the dairy cow growth rate. In May and June of last year, California experienced its first month to month decline in dairy cow numbers in 16 years. But the growth rate began picking up again later in the year.
As mentioned in an earlier column, a CAFA member called 2003 “the hay season from hell.” Hopefully, he won't be repeating the same theme come this fall. At least for now, there are enough positive developments that indicate the 2004 season will be looked at in a much better light at this time next year.