Depending on where they emerge, groundhogs may be finding improved moisture conditions across some major U.S. hay-producing regions when they poke their heads out of the ground in early February.
Since late October, U.S. Drought Monitor maps indicate regional moisture improvements continuing into the year’s end. As of Dec. 31, approximately 36% of U.S. hay-producing acreage (Figure 1) was considered under drought conditions, down 12% from a month earlier. Drought areas of hay acreage have now returned to similar levels seen a year ago.
The estimate of alfalfa hay-producing acreage (Figure 2) under drought conditions was lowered to 46%, down 4% from a month earlier and substantially lower than the peak of 65% to end October. However, the national average of alfalfa hay acreage under drought conditions to start 2025 remains nearly double of that a year ago.
The recent improvement has not been universal. As the calendar turned to 2025, extremely high percentages of hay and alfalfa hay acreage remained under drought conditions in Nebraska, South Dakota, Wyoming and Arizona.
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 $235 per ton for Premium and Supreme alfalfa hay in November, a $1 decrease from October (Table 1). The average price was $36 lower than November 2023.
Alfalfa
The U.S. average price for all alfalfa hay fell $8 in November to $165 per ton. Prices were lower in 10 of 27 major forage states, with the largest declines in New York and Pennsylvania. Prices were up in nine states, led by increases in Minnesota and Wisconsin.
With few exceptions (California, Missouri and Illinois), year-over-year alfalfa hay prices were down substantially.
Other hay
At $147 per ton, the November 2024 U.S. average price for other hay was unchanged from October. Prices rose in nine of 27 major hay-producing states, with the largest month-to-month increase in Oklahoma ($12). Largest decline was in Wisconsin (-$12), leading eight other states in which prices fell.
Expanding the timeline, the November 2024 U.S. average price for other hay was $27 less than a year ago, with declines of $60 or more in Colorado, Minnesota, New Mexico and Texas. In contrast, prices rose about $25 in Pennsylvania and New York.
The gap between average U.S. alfalfa and other hay prices was about $18 per ton in November, the narrowest monthly spread in at least five years.
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 Dec. 11, Premium/Supreme alfalfa in 3X4 bales averaged $310 per ton, with Supreme alfalfa in 3X4 bales averaging $300 per ton. Supreme 4X4 bales averaged $200 per ton.
Exports
At 165,947 metric tons (MT), November exports of dairy-quality alfalfa hay remained fairly steady since July, pushing the year-to-date total above 1.97 million MT. China remained the top buyer, importing 79,213 MT during the month, a four-month high, and pushing the 11-month total to 857,378 MT. November shipments to Japan were fairly steady at about 25,747 MT. While November sales to Saudi Arabia dipped from large purchases in October, the monthly total was 30,254 MT. Combined, those two countries have now purchased about 676,000 MT during the year.
Japan and South Korea again led importers in the other hay category, although total November sales fell to 79,986, a six-month low. Japan purchased 43,983 MT during November, followed by South Korea’s 23,027 MT. Year-to-date U.S. sales reached 963,269 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 mixed in November. Largest declines were in cubed products.
Regional markets
Regional hay sales and market reports were limited by Christmas and New Year’s holidays.
- Midwest: In Iowa, hay sales were weaker in a light test. There was light to moderate demand, especially on squares.
In Kansas, demand remained light, while movement of previously purchased grinding hay bumped up significantly in the southwest region. Prices were mostly steady. The supply of available hay remained heavy.
In Illinois, trade was active with good demand to end December. Prices for hay in small squares were mostly steady, but larger packages traded steady to as much as $24 higher. Wheat straw in small squares sold $3.50 per bale higher.
In Missouri, the supply of hay was moderate to heavy and demand remained light to moderate. A slight increase in demand was noted, mostly from equine and small-farm customers without a lot of storage. There was a slight uptick of hauling of previously purchased hay ahead of an upcoming storm.
In Nebraska, all reported hay sales sold steady. Demand was mostly light, with best demand coming from backgrounding and feedlots. Many hay sellers were hoping for more snow to cover fields or winter ranges so they could move additional tons of hay before the 2025 haying season arrives.
- East: In Alabama, hay prices were steady, trade moderate with moderate supply and good demand.
- Southwest: In California, trade activity and demand were moderate. Retail hay demand was good while dairy and export hay demand was light.
In Arizona, 2024 hay production came to an end and most producers were getting fields and equipment ready for the new year. With sales slower than usual, most hay was being stored in barns.
In Oklahoma, demand for hay remained light and prices were steady.
- Northwest: In Montana, demand was very light to end the year, and movement remained very slow. Warm weather and open pastures allowed ranchers to keep cows out on pasture. Producers continued to advertise hay with some dropping prices in an effort to move heavy supplies. Demand for horse hay remained good but sales were mostly single or partial loads. Old-crop (2023) hay and straw remained on the market with price offerings under production costs.
In Utah, movement and demand were slow throughout the state.
In Idaho, producers said year-end demand and movement were slow.
In Wyoming, deals were limited as producers said movement and demand remained slow.
In Colorado, hay trade was active on light to moderate demand. Grass hay, millet hay and straw sold mostly higher; cornstalks sold lower.
Other things we’re seeing
- Dairy: A declining U.S. average milk price offset lower costs for soybean meal and alfalfa hay, driving the Dairy Margin Coverage (DMC) program’s November U.S. average milk income margin down to $14.29 per hundredweight (cwt), 88 cents per cwt lower than October’s margin. Based on early estimates, December milk prices, feed costs and income margins will all shrink.
- Cattle: Virtually all cattle prices were trending higher during the fourth quarter of the year. Beef cattle prices ended November at about $188 per cwt, up $1 from October. Higher beef steer and heifer prices offset a small decline in market cow prices.
- Fuel: National average fuel prices rose to start the new year, according to the U.S. Energy Information Administration (EIA). The U.S. retail price for regular-grade gasoline averaged almost $3.05 per gallon on Jan. 6, up 4 cents from the previous week but 2.5 cents less than the same week a year ago. The average U.S. on-highway price of diesel was $3.56 per gallon, up nearly 6 cents from the prior week but 27 cents less than early January 2024.
- Trucking: Spot flatbed prices were fairly steady to start January, up a penny from December and averaging $2.42 per mile nationally, according to DAT Trendlines. Regionally, average spot prices per mile were: Southeast – $2.50, Midwest – $2.56, South – $2.30, Northeast – $2.29 and West – $2.25.
- Other costs: The USDA’s November index of prices paid for commodities and services, interest, taxes and farm wages were mixed. Machinery costs inched higher from October and were up 1.3% from November 2023. Compared to previous monthly and year-earlier averages, fertilizer prices also increased but total feed and fuel costs were down.
More recently, while the Federal Reserve lowered interest rates in mid-December, USDA Farm Service Agency (FSA) interest rates for nearly all farm operating and ownership loans increased for a second consecutive month to start January 2025.
