By the time this column appears we'll have an indication of whether alfalfa acreage has changed or stayed at the same level as last year. Unlike previous years the people we've talked to don't expect acreage to increase or move substantially up or down.
In fact, there may be a small decrease despite the record-breaking hay market that continues to hit price levels no one would have predicted a few short years ago. In early March, for example, Market News reported a price range of $207 to $225 for Fair quality alfalfa or dry cow hay delivered to Tulare dairies.
Having everyone on the same page for acreage predictions takes the fun out of analyzing the best guess estimates, followed by the 20-20 hindsight as to why some forecasts missed the mark. The Planting Intentions Report the National Agricultural Statistics Service or “NASS” releases in March is an “all hay” estimate that doesn't separate out alfalfa acreage. The breakout of alfalfa and all other hay will be in the June report.
The March report should provide a relatively sound basis for analyzing acreage trends in 2008. Like last year, the supply-demand curve obviously favors hay growers, who can only hope dairymen will continue to turn a profit during an increasingly tenuous time for the milk industry.
In the weekly Hoyt Report (www.thehoytreport.com), veteran analyst Seth Hoyt pointed to the makings of a “perfect storm” in his March 14 subscription newsletter. The perfect storm elements for the dairy industry are the high cost of protein feeds, depleted supplies of old crop alfalfa, and 45,000 more dairy cows than last year. The price surge for protein feeds, says Hoyt, may be driving the record high alfalfa market. “High protein hay”, he points out, “has added value in the ration.”
Also, as everyone knows, the corn ethanol boom is another obstacle for the dairy industry. The bottom line is that profit margins may keep shrinking or disappear and put considerable downward pressure on the hay market. If the dairy industry can find a way to battle the perfect storm, then there does not appear to be any outside factors that will significantly impact the hay market in the foreseeable future.
Thanks to USDA-APHIS
Last fall we reported on a conference call with USDA-APHIS to make Roundup Ready alfalfa regulations more practical for growers. Of all the regulations in the administrative order APHIS sent in July, the requirement to tag each bale of hay that leaves the farm stuck out like a sore thumb.
The people at APHIS listened to the concerns and options presented by several CAFA board members. We got the impression they would present the recommendations to the federal judge whose injunction prevents planting of RR alfalfa until APHIS completes an Environmental Impact Statement.
A supplemental administrative order was issued in December and APHIS deserves a pat on the back for offering “lot identification and documentation” as an option to bale tagging. It incorporates tracking data such as RR alfalfa designation, name, signature, address of buyer and seller, lot number, number of bales, etc., plus an 8.5 × 11 inch ‘Roundup Ready Alfalfa’ sign on the vehicle. To view the supplemental order visit, www.aphis.usda.gov/biotechnology/alfalfa.shtml.