Santa may be coming to town, and we are hoping he brings higher prices. While the markets seem to be slow, hay prices are relatively unchanged as winter begins to creep in. Take a closer look at prices and conditions in each region in the Progressive Forage Forage Market Insights column as of Nov. 13, 2024.
Moisture conditions fall short
Overall U.S. drought monitor maps indicate drought areas that are once again on the rise. As of Nov. 12, approximately 54% of U.S. hay-producing acreage (Figure 1) was considered under drought conditions, with 52% being reported the month prior. The area of alfalfa hay-producing acreage (Figure 2) under drought conditions reported to be 58%, with 57% 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 $227 per ton of Premium and Supreme alfalfa hay in the month of September, a $9 decrease from August. The price is $61 lower than what was reported in September 2023 (Table 1).
Exports
Dairy-quality alfalfa hay exports fell 9% in September for a total of 143,218 metric tons exported. China remained the top purchaser and increased U.S. alfalfa hay imports by 8% from August to September for a monthly total of 59,835 metric tons. While a lesser quantity, Japan posted the largest month-over-month increase at 23% (totaling 34,019 metric tons).
The month’s regression in exports was largely due to Saudi Arabia’s drastic decline in purchases. The country imported 60% less alfalfa hay in September compared to August for a total of 15,379 metric tons.
In total, September’s dairy-quality hay exports added to year-to-date sales of 1,633,483 metric tons.
Japan and South Korea once again led as importers in the U.S. other hay category, yet purchases were mixed between the two countries. Japan posted a 7% increase month over month for a total of 52,406 metric tons of U.S. other hay purchased, while South Korea imported 24% less than a month prior for a total of 17,856 metric tons.
The month’s total U.S. other hay exports were down 7% at 83,815 metric tons. Year-to-date exports are at 794,760 metric tons.
Regional markets
- Midwest: In Nebraska, bales of alfalfa and grass hay sold steady. Sun-cured and dehydrated alfalfa were selling steady.
In Kansas, demand remained light with steady prices. Buyers aren’t buying and sellers aren’t willing to lower prices to get things moved.
In South Dakota, hay sales are slightly stronger with hay moving out of state and being stored in barns. Corn harvest is finishing and cornstalks are being baled; significant rains fell over some parts of the state.
In Missouri, previously drought-stricken areas have been pelted by large volumes of hay and precipitation, particularly in the southern part of the state. Hay supplies are reported as moderate to heavy 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 sold strong and alfalfa-grass mix sold steady. Wheat straw was weak on a light test, but corn fodder held strong.
- Southwest: In California, trade activity and demand were reported as light to moderate, with dairy hay demand good and export hay demand light.
In New Mexico, hay demand is steady while some parts of the state are beginning to see their first freeze and halt of production. While much of the state remains dry, heavy rainfall was noted along the eastern border.
In Oklahoma, the hay trade is slow with not enough movement to report it as steady. Rain has moved across the state and will continue to move through most of November.
In Texas, hay prices are steady across most of the region with movement beginning to pick up in demand. Some supplementation of feeding cattle has begun in some regions of the state.
- Northwest: In the Columbia Basin, domestic hay is steady in a light test. No reported hay sales or retail hay this week.
In Montana, hay sold mostly steady while hay movement was moderate to light this week. Demand was light, and supplies of hay were steady.
In Idaho, movement has increased over the last few weeks. Producers are saying demand and movement are slow for this time of year, but more deals are being reported in recent weeks.
In Colorado, trade activity was moderate on light demand, and hay sales were progressing in some dairy and horse hay markets.
In Wyoming, movement is lower than normal the past week and overall demand and movement are low for this time of year.
Other things we are seeing
- Dairy: The milk production forecast for 2024 is raised from last month. Based on the most recent Milk Production report, lower reported milk cow numbers for the third quarter of 2024 were more than offset by higher output per cow. The milk forecast for 2025 is unchanged. For 2024, the butter price forecast is reduced as prices have continued to fall from the relatively high levels they maintained for much of the year through late September. The cheese price forecast for 2024 is unchanged, and both nonfat dry milk (NDM) and whey price forecasts are raised due to strong demand for both sets of products. 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 $20.75 per cwt. The all-milk price forecast is lowered a nickel to $22.75 per cwt. For 2025, projected butter price forecasts were lowered due to relatively higher inventories heading into the 2024 holiday season. The cheese price forecast is raised, based on higher prices and tight inventories in late 2024. Whey and NDM price forecasts for 2025 are both raised based on stronger domestic and international demand. As a result, next year’s Class III milk price is forecast at $19.30 per cwt, and the Class IV price is projected at $20.30 cwt. The 2025 all-milk price is raised a dime to $22.85 per cwt.
- Cattle: Looking ahead to 2025, beef production is raised due to heavier expected dressed weights and higher expected steer and heifer slaughter, partially stemming from higher than previously expected placements during the second half of 2024. As these cattle are placed on feed in the first half of the year, they will likely be marketed and slaughtered in the second half.
For 2024, cattle price forecast for the fourth quarter is raised based on recent prices and the continued strength in beef demand. The price strength is expected to carry into the first quarter of 2025. The fed cattle price forecast for 2024 was estimated at $186.68 per cwt, with prices averaging $188 per cwt in the fourth quarter. The 2023 average was $175.54 per cwt.
- Cottonseed: As a predictor of cottonseed availability, the news is mixed. The 2024-25 harvested cotton acreage was forecast at 8.63 million acres, unchanged from last month and up 34% from 2023-24. However, cotton production is reduced to 14.2 million 480-pound bales, slightly down from last month’s forecast but up 18% from 2023. Based on conditions as of Nov. 1, yields are expected to average 789 pounds per harvested acre, unchanged from the previous forecast and down 110 pounds from 2023.
- Corn outlook: Corn production for 2024-25 is forecast at 15.1 billion bushels and is down 60 million bushels from last month’s forecast. Although down 1% from 2023, if realized it would be the third-highest production for grain on record for the U.S.
Based on conditions as of Nov. 1, yields are expected to average a record-high 183.1 bushels per acre, down 0.7 bushel from last month’s projection and up 5.8 bushels from last year’s final estimate of 177.3 bushels. Area harvested for grain is forecast at 82.7 million acres, unchanged from the previous forecast but down 4% from the previous year.
At $4.10 per bushel, the projected season-average corn price received by producers was unchanged from the October forecast and is down 45 cents from the 2023-24 average of $4.55 per bushel.
