Josh Callen, market analyst and author of The Hoyt Report, gave attendees at the California Alfalfa and Forage Symposium an update on hay markets in the western U.S.
Hay prices continued to lower in 2024, a continuing trend since their peak in 2022. Mixed milk prices and less alfalfa utilized in dairy rations have contributed to the price downturn. Feed prices, particularly alfalfa, are connected to corn and canola prices, which have also been trending downward (see Figure 1). As drought conditions have eased in the past few years, hay production has picked back up, lessening pressure on the market. An additional result of peak hay prices in 2022 is that, due to hay prices being prohibitively high, dairy farmers figured out a way to use less alfalfa in their dairy rations. “Some dairies say they like to use canola as a substitute for high-protein alfalfa in some instances,” Callen said. “So as those prices go down, that creates more competition in the market for it.”
Another contributing factor is softer demand from the export markets, China in particular. A stronger U.S. dollar put a dent in exports, especially to Asian markets and gave competing exporters a bigger advantage. “When the dollar is so high against the yen and especially against the Korean won lately – the dollar has reached a 20-year high – that really makes our products unaffordable for a lot of those customers over there.”
By Carrie Veselka
January 27, 2025
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