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Drought, Dairy Demand Expected to Boost Alfalfa Prices

Author: Kristy

FEBRUARY 11, 2014

By: Catherine Merlo, Dairy Today Western and Online Editor

 

 

Hay market expert Seth Hoyt says dairies are back in the driver’s seat.

How high can alfalfa prices go?

Long-time hay market forecaster Seth Hoyt believes top-quality alfalfa could shoot to $320 per ton, well past the $280 it’s selling for this week in Central California’s dairy country.

“Where the top is, I don’t know,” Hoyt said today during his annual presentation at World Ag Expo in Tulare, Calif.

The drought in the West, record high milk prices and strong demand are propelling alfalfa prices upward.

“The uncertainty of feed supplies for dairies seems to be the biggest driver in the alfalfa hay market,” he said.

Milk prices have reached record highs, with February Class III futures at $23 per cwt. Herd culling among California dairies is down 10-20%. The state also has some 4% fewer heifers. “Dairies out here don’t the heifers available that other parts of the U.S. do,” Hoyt said.

At the same time, California dairies have seen relief from high corn prices. The cost of rolled corn has dropped since last fall, and is now some $90-$100 per ton below supreme alfalfa hay in the Tulare-Hanford-Visalia area. The cost of production among California dairies also may be edging downward by about $1 per cwt. to around $17 per cwt.

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