Forage production trends and forage markets are very regional, depending on what’s being grown, how it is being used, and local inventories. Still, the average alfalfa price for 2022 was a record high, and all signs indicate that 2023 will follow suit.
“There is no reason to think hay prices won’t stay high,” said Mike Rankin, managing editor of Hay & Forage Grower magazine, during the November Hoard’s Dairyman webinar. He addressed a few of the reasons that will affect hay prices for both growers and buyers in the year ahead.
One factor is reduced inventory. The USDA’s May hay stocks report showed declining inventory, and while Rankin said it was not at a record low, it is getting close to that level. The upcoming December numbers will give a clearer picture of the nation’s hay stocks following the 2022 growing season.
Meanwhile, the USDA forecasts that alfalfa hay production will be down about 1% from last year, with grass hay production falling a more substantial 11%. Rankin noted that this reduction in production is likely tied to drought conditions that impacted the Central and Southern Plains in 2022. In general, drought conditions have become more normal, especially in the West, and Rankin said this will keep hay prices high.
There are also logistical challenges of getting hay from Point A to Point B. Between a shortage of trucks and drivers and escalating fuel costs, the expense of transportation also contributes to current hay prices.
Exports for alfalfa remain strong, especially to China, Rankin said. That will bolster demand and support a higher price tag for the forage. In addition, commodity prices are also elevated, and Rankin said hay prices tend to follow them. Finally, with costly inputs, making hay is simply going to cost more.
“These are all reasons why I wouldn’t expect hay prices to go down appreciably, at least in the short run,” Rankin predicted.
The September U.S. average alfalfa hay price was a record $277 a ton. That’s up from 2021’s $214 per ton and more than $100 higher than the price per ton in 2020. The price of Supreme and Premium quality hay also reached a record high of $343 per ton in August of this year.
“We are in record-setting territory for hay prices,” Rankin stated.
To learn more about the factors affecting forage prices, watch the November Hoard’s Dairyman webinar, “A feed and forage outlook for the year ahead.”