Larger harvests are impacting dry hay markets in many regions. The USDA will release estimates of December 2024 on-farm hay inventories as well as production summaries for all forage crops on Jan. 10, 2025. Meanwhile, here’s a look at production and market conditions as 2024 comes to a close.
Moisture conditions improve
U.S. drought monitor maps indicate regional moisture improvements moving into the year’s end. As of Dec. 3, approximately 48% of U.S. hay-producing acreage (Figure 1) was considered under drought conditions, down 10% from a month earlier. Alfalfa hay-producing acreage (Figure 2) under drought conditions was lowered to 50%, down from 61% a month prior. Both maps showed better moisture conditions in the Northwest, Upper Midwest and Oklahoma.
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 an average price of $236 per ton for Premium and Supreme alfalfa hay in October, a $9 increase from September (Table 1). The average price was $42 lower than October 2023.
Alfalfa
The U.S. average price for all alfalfa hay rose $1 in October to $173 per ton. Prices were up in 13 of 27 major forage states, led by increases in Pennsylvania, New York, Wyoming and Wisconsin. Prices were lower in just six states, with the largest decline in Texas.
With few exceptions (Ohio, California, Pennsylvania and Illinois), year-over-year alfalfa hay prices were down.
Other hay
At $147 per ton, the October 2024 U.S. average price for other hay was up $7 per ton from September. Prices increased in nine of 27 major hay-producing states, with the largest month-to-month increases in New York and Pennsylvania ($27). The largest decline was in Texas (-$28).
Expanding the timeline, the October 2024 U.S. average price for other hay was $25 less than a year ago, with declines of $50 or more in Minnesota, Iowa, New Mexico, Wyoming and Colorado. In contrast, prices rose $15-$35 in California, Ohio, Pennsylvania and New York.
The spread between average U.S. alfalfa and other hay prices was about $25 per ton in October.
Organic hay
The USDA’s latest National Organic Grain and Feedstuffs Report offered a small sample of price summaries for spot transactions (free on board [f.o.b.] farmgate). For the two-week period ending Nov. 27, Supreme alfalfa in 3X4 bales averaged $280 per ton, with Supreme 4X4 bales averaging $200 per ton. Good 3X4 bales averaged $240 per ton.
Exports pick up
At 168,312 metric tons (MT), exports of dairy-quality alfalfa hay hit a five-month high in October, pushing the year-to-date total above 1.8 million MT. China remained the top buyer, importing 62,105 MT during the month and 778,165 MT through the first 10 months of 2024. While shipments to Japan were fairly steady at about 25,680 MT, October sales to Saudi Arabia surged to 45,612 MT, a six-month high. Combined, those two countries have now purchased about 620,000 MT during the year.
Japan and South Korea once again led importers in the other hay category, pushing the monthly U.S. total to 88,523 MT. Japan purchased 49,133 MT during October, followed by South Korea’s 24,626 MT. Year-to-date U.S. sales reached 883,283 MT, with sales to Japan and South Korea representing about 82% of that total.
U.S. exports of dehydrated and sun-dried alfalfa cubes and dehydrated alfalfa meal were higher in October – in most cases hitting or nearing the largest monthly totals for the year. Together, those product categories have reached about 100,000 MT for January-October 2024.
Regional markets
- Midwest: In Iowa, alfalfa was weaker and grass hay steady to stronger. Trade was slow to moderate with moderate to good demand.
In Kansas, demand remained light and prices were steady. Grinder hay movement did pick up a bit. The supply of hay available remained heavy and was likely to remain that way unless winter weather turned severe.
In Illinois, trade was active with moderate to good demand on a much larger supply of quality hay, but weather impacted price consistency. Wheat straw in small squares sold lower.
In South Dakota, sales were steady.
In Missouri, hay prices were steady, although movement was very slow. The supply of hay was moderate to heavy and demand was light.
In Nebraska, all reported forages sold steady to weak. Demand was good in the western side of the state but mostly light elsewhere. Some farmers were baling cornstalks and selling them for less than baling costs. Open grazing limited the need for feed supplementation. Some hay producers with cow herds are starting to think about not selling any more hay due to drought concerns. Beef herd liquidation was adding downward pressure to a stagnate hay market.
- East: In Alabama, demand increased as temperatures fell; trade and supplies were moderate with good demand.
In Pennsylvania, hay sold $15-$20 higher, with moderate demand and light to moderate supplies. Straw and corn fodder were mostly steady.
- Southwest: In California, trade activity and demand were moderate. Retail hay demand was good, and dairy and export hay demand was light.
In New Mexico, the season’s hay reports ended as northern parts of the state saw the first freeze and snowfall. Hay demand was steady.
In Arizona, demand was increasing on steady prices. Yields were starting to drop off, and producers expected one more cutting before the season’s end. Most hay was being shipped out of state to Texas, Oklahoma and Georgia.
In Oklahoma, trade was slow to steady, with supply abundant and outpacing demand.
In Texas, hay prices were mostly steady across all regions. Hay movement and demand continued to increase as warm-season grasses entered dormancy.
- Northwest: In Montana, hay sold generally steadily but movement was very slow. Open pastures curbed hay demand. Beef feedlots showed some interest but were not willing to pay Western dairy hay prices. Demand from horse hay buyers remained good, but sales were mostly single or partial load sales. With a heavier supply of dairy hay available, demand is light. Old-crop hay and straw remained on the market, but producers said price offerings are under production cost.
In Idaho, Utah and Wyoming, producers said movement and demand were slow for this time of year.
In Colorado, hay trade activity and demand were light, with some activity on the cornstalk market sent to feedlots. Small squares of horse hay were steady to slightly higher.
Other things we’re seeing
- Dairy: A declining U.S. average milk price and higher costs for corn and alfalfa hay drove the Dairy Margin Coverage (DMC) program’s October U.S. average milk income margin down to $15.17 per hundredweight (cwt). While down 40 cents per cwt from September, the margin is still one of the largest in the USDA program’s history.
- Cattle: For dairy producers seeking replacement cows, U.S. average prices hit a new record high in October at $2,600 per head, with the highest prices in the Midwest and Texas. Virtually all other cattle prices were trending higher during the fourth quarter of the year. October beef cattle prices ended the month at about $187 per cwt, up $4 from September. Higher beef steer and heifer prices offset a small decline in market cow prices.
- Fuel: Fuel prices were down slightly to start December and remain below year-ago levels, according to the U.S. Energy Information Administration (EIA). The U.S. retail price for regular-grade gasoline averaged $3.03 per gallon on Dec. 2, down a penny from the previous week and almost 20 cents less than the same week a year ago. The average U.S. on-highway price of diesel was $3.54 per gallon, unchanged from the prior week but 55 cents less than early December 2023.
- Trucking: Despite cheaper fuel costs, spot flatbed prices trended higher to start December, up 3 cents from November and averaging $2.41 per mile nationally, according to DAT Trendlines. Regionally, average spot prices per mile were: Southeast – $2.49, Midwest – $2.52, South – $2.30, Northeast – $2.29 and West – $2.22.
- Other costs: The USDA’s October index of prices paid for commodities and services, interest, taxes and farm wages were mixed. Machinery costs were unchanged from September but up 0.7% from October 2023. Compared to previous monthly and year-earlier averages, fertilizer prices were up less than 0.5%.
