While harvest slows down and cooler temperatures take over, the hay market is also showing some frosty edges. As the 2024 growing season comes to an end, we have a better idea of hay stores and what we have to deal with going into the winter months. Take a closer look at prices and conditions in each region in the Progressive Forage Forage Market Insights column as of Oct. 9, 2024.
Moisture conditions fall short
Overall U.S. Drought Monitor maps indicate drought areas that are once again on the rise. As of Oct. 15, approximately 52% of U.S. hay-producing acreage (Figure 1) was considered under drought conditions, with 31% being reported the month prior. The area of alfalfa hay-producing acreage (Figure 2) under drought conditions reported to be 57%, with 30% the month prior.
A snapshot of hay prices
Price data for 27 major hay-producing states is mapped in Figure 3, illustrating the most recent monthly average price and one-month change. The lag in USDA price reports and price averaging across several quality grades of hay may not always capture current markets, so check individual market reports elsewhere in Progressive Forage.
Dairy hay
The top milk-producing states reported a price of $236 per ton of Premium and Supreme alfalfa hay in the month of August, a $1 decrease from July. The price is $46 lower than what was reported in August 2023 (Table 1).
Exports
Dairy-quality alfalfa hay exports were down 5% in August from July. China was still the largest purchaser but also decreased U.S. dairy-quality alfalfa hay imports by 32%. The second-largest purchaser was Saudi Arabia, up 34% from a month prior.
In total, August’s dairy-quality hay exports were 157,353 metric tons, adding to a year-to-date total of 1,490,265 metric tons.
Japan and South Korea led the charge of U.S. other hay purchases at 48,852 metric tons and 23,529 metric tons, respectively. The month’s total was 89,760, up 13%, and contributing to a year-to-date total of 710,945 metric tons for 2024.
Regional markets
- Midwest: In Nebraska, all reported hay sold steady while the fourth and fifth cutting are being completed. Some feedlots have moved away from cornstalks and switched to alfalfa despite some farmers still baling cornstalks to remove residue from the fields.
In Kansas, demand remained light with steady prices and a softer undertone than the previous weeks. Harvest is still in full swing around the state for corn, beans and milo.
In South Dakota, demand and overall movement for all hay has been extremely slower than normal. Reports are of corn harvest and hay sales going out of state.
In Missouri, cooler temperatures are marking the beginning of fall. Corn production is reported to be around 70% done with 23% of soybeans being harvested. Hay supplies are reported as a surplus or adequate for the majority of the state.
- East: In Alabama, hay prices are reported as steady with both moderate supply and light demand.
In Pennsylvania, alfalfa and grass mixes are selling steady with a weak undertone noted.
- Southwest: In California, trade activity and demand were reported as moderate with dairy hay demand good and export hay demand light.
In New Mexico, hay is sold steady with light demand and not much movement. Alfalfa hay is in the fifth cutting for the majority of the state, and with cooler temperatures in sight, is beginning to slow down.
In Oklahoma, moisture conditions have worsened with no rain in the immediate forecast. Grass has stopped growing and the barns are still full of hay.
In Texas, mostly steady hay prices are steady across all regions. Light demand is reported as well as hay movement. The majority of hay being produced is in the utility to fair category.
- Northwest: In the Columbia Basin, all grades of hay are sold steady and a weak undertone is noted by export buyers, while overall trade remains slow. Retail hay is still in good demand and moving with light to moderate overall demand.
In Montana, hay sold steady with new crop being available, continuing to slow movement. Most producers are experiencing light interest as excess carryover from 2023 is causing slow movement in new-crop hay.
In Idaho, demand and movement are slow comparatively for the time of year with producers reporting low demand all around.
In Colorado, trade activity was moderate on light demand and hay sales were progressing in some dairy and horse hay markets.
In Wyoming, bales of hay were selling steady on a thin test while cubes and pellets are still being sold steady.
Other things we are seeing
- Dairy: For 2024, price forecasts for cheese and butter declined, while whey and nonfat dry milk (NDM) are raised on recent price strength and expected demand strength. As a result, the Class III milk price is now forecast at $19.05 per hundredweight (cwt), and the Class IV price is projected at $20.80 per cwt. The all-milk price forecast is lowered 25 cents to $22.80 per cwt.
For 2025, projected milk prices were lowered from last month’s outlook. Price forecast for cheese and butter declined, while price projections for whey and NDM were raised on recent price strength and expected demand strength. As a result, next year’s Class III milk price is forecast at $18.95 per cwt, and the Class IV price is projected at $20.35 per cwt. The 2025 all-milk price is forecast at $22.75 per cwt.
- Cattle: Marketings in July tallied 1.855 million head, up nearly 8% year over year. On a per-day basis, however, marketings were about 2% lower due to the two additional slaughter days in July 2024. The year-over-year increase in marketings was largely expected with a large share of cattle on feed over 150 days. For example, two of the largest cattle-feeding states – Kansas and Texas – held 12% and 32%, respectively, of their share of cattle on feed over 150 days on Aug. 1 (Figure 1). As a result, these feedlots had more market-ready cattle available than at the same time last year. Nebraska, the state with the second-largest number of cattle on feed, has about 5% of its cattle on feed over 150 days, but it is lower than last year. Nonetheless, market conditions are encouraging feedlots to add weight to carcasses, allowing packers to offset fewer cattle supplies.
- Farm bill updates: The current farm bill originally became law in 2018. There is a possibility that the current bill could receive another extension or that new legislation could be passed before the end of the calendar year, but either outcome seems unlikely. The Senate and House are currently in recess until after the Nov. 5 election, and farm bill talks will probably struggle to gain enough traction in a lame-duck Congress to pass both chambers before the new session begins in January.
- Corn outlook: Based on conditions as of Sept. 1, the USDA National Agricultural Statistics Service (NASS) September Crop Production report indicates U.S. corn yields are expected to average 183.6 bushels per acre. This forecast is based on yields reported by farmers, objective yield survey data and remote sensing information. This forecast is 0.5 bushel per acre higher than last month’s projection – driven by increased yields in Iowa, Indiana, Nebraska, South Dakota and Kansas. NASS had the opportunity to revise planted and harvested area, based on the latest certified acreage data from the FSA, but no changes were made to corn planted or harvested area this month. The higher yield forecast contributes to a slightly higher 2024-25 corn production forecast of 15.2 billion bushels.
