With the 2025 cropping year set to get underway, outlooks for both the planting and marketing seasons turned cloudier with the announcements of tariffs on major trading partners, potentially impacting crop production input costs and hay export markets. At deadline, tariff implementation on Canada and Mexico was delayed.
Here’s a look at what we do know about hay and forage markets as spring moves closer.
U.S. Drought Monitor maps indicate regional moisture conditions worsened slightly to start February, with areas under drought now double what they were a year ago.
As of Feb. 4, approximately 39% of U.S. hay-producing acreage (Figure 1) was considered under drought conditions, up 3% from a month earlier. The estimate of alfalfa hay-producing acreage (Figure 2) under drought conditions increased to 52%, up 6% from a month earlier.
States with highest drought ratings include Arizona, South Dakota, Wyoming and Nebraska.
A snapshot of hay prices
The USDA 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 the 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 $230 per ton for Premium and Supreme alfalfa hay in December, a $5 decrease from November (Table 1). The average price was $45 lower than December 2023.
For the year, prices in those states averaged $251 per ton, $48 less than 2023.
Alfalfa
The U.S. average price for all alfalfa hay dipped $1 in December to $164 per ton. Prices were lower in 14 of 27 major forage states, with the largest declines in Colorado and Utah. Prices were up in seven states, led by increases in New York and Pennsylvania.
With very few exceptions (California, Missouri, Ohio and Pennsylvania), year-over-year alfalfa hay prices were down substantially.
Other hay
At $145 per ton, the December 2024 U.S. average price for other hay was down $2 from November. Prices rose in just five of 27 major hay-producing states, with the largest month-to-month increase in Montana ($15). Declines were recorded in 14 states, led by Iowa, Arizona, Colorado, Minnesota, New Mexico, Utah and Wisconsin (all down $9-$11).
Expanding the timeline, the December 2024 U.S. average price for other hay was $29 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 $19 per ton in November-December, 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 [FOB] farmgate). For the two-week period ending Jan. 22, Premium alfalfa in 3X4 bales averaged $204 per ton, with a range of $130-$220 per ton. Good prairie grass in 3X4 bales averaged $180 per ton.
Exports
At 160,619 metric tons (MT), December exports of alfalfa hay remained fairly steady since June, pushing the year-to-date total above 2.13 million MT. China remained the top buyer, importing 80,069 MT during the month, a five-month high, and pushing the 2024 total to 937,447 MT. December shipments to Japan also maintained a steady seven-month trend at 28,142 MT.
Exports of other hay hit 87,863 MT in December, bringing the 2024 total to 1.05 million MT. As usual, Japan and South Korea led buyers in the other hay category: Japan purchased 42,685 MT during December, followed by South Korea’s 26,592 MT.
U.S. exports of dehydrated alfalfa cubes and meal were up in December, with sun-dried cube and meal products down slightly.
For more on the hay export market, read: Export market dynamics: Good, to difficult, to different.
Regional markets
Regional hay sales and the USDA Ag Marketing Service market reports picked up as January came to an end.
- Midwest: In Iowa, trade was active with light to moderate demand.
In Kansas, demand remained light, but trades picked up a bit in the southwest and south-central regions. Prices remained steady with plenty of hay still available.
In Illinois, better-grade small-package hay sold higher, while most midgrade hay sold mostly steady.
In Missouri, there continued to be an ample supply of hay, with demand light to moderate and prices unevenly steady to weak.
In Nebraska, hay sold steady with demand mostly light to moderate on small square bales. Some producers held on to supplies hoping for higher prices, while buyers held out in hopes that large inventories will prevent prices from skyrocketing, as the next growing season appears dry.
- East: In Alabama, hay prices were mostly steady, and trade was moderate with moderate supply and good demand.
In Pennsylvania, higher-quality forages were in very good demand, while average-quality hay experienced light demand, resulting in a significant price spread. Alfalfa and alfalfa-blended hay sold mostly $15-$20 higher; grass hay sold $25-$50 lower.
- Southwest: In California, trade activity and demand were moderate. Retail hay demand was good, while dairy and export hay demand was light to moderate.
In Oklahoma, demand for hay remained light, and prices remained steady. Many hay producers still had barns full.
In Texas, hay prices were steady to end January across all regions as demand picked up, but movement was limited due to road conditions.
- Northwest: In Montana, hay sold generally steady to weak, with sales limited to large supplies and mild weather. Dairy hay sales have been slow with most sales leaving the state. Several large sales of 2023 hay continues to move as producers cut losses and try to start selling their 2024 hay crop.
In Utah, local demand improved, and prices strengthened as some farms sold out of hay for the year to get ready for this next growing season.
In Idaho, hay demand and movement increased slightly but it is still slow, with prices starting to see an upward trend.
In the Washington-Oregon Columbia Basin, trade remained slow with light to moderate demand for export and domestic supplies and good demand for stable supplies.
In Wyoming, deals remained limited as demand was slow with hay and roughage supplies rated mostly adequate.
In Colorado, hay trade was active on moderate demand. Alfalfa sold higher while prairie/meadow hay sold slightly lower. Prices remain unchanged on horse hay. Dairies in northeast Colorado started making offers for standing alfalfa and triticale.
Other things we’re seeing
- Dairy: The USDA’s January 2025 Cattle Inventory report indicated a fairly steady U.S. dairy cow and replacement heifer herd compared to a year earlier, with a slight uptick in cow numbers (9.35 million head) offset by a small decline in available replacement heifers (3.91 million head). A decline in December’s milk price was somewhat offset by lower alfalfa hay and soybean meal prices.
- Cattle: The USDA’s January 2025 Cattle Inventory report indicated a slightly smaller beef cow and replacement heifer herd to start the year. Beef cows were estimated at 27.86 million head; heifers expected to calve in 2025 at 2.92 million head. Virtually all cattle prices trended higher to end the year. Beef cattle prices ended December at about $190 per hundredweight (cwt), up $2 from November. Higher beef steer and heifer prices again offset a small decline in market cow prices.
- Fuel: National average fuel prices were mixed to start February, according to the U.S. Energy Information Administration. The U.S. retail price for regular-grade gasoline averaged $3.08 per gallon on Feb. 3, down 2 cents from the previous week and 5.4 cents less than the same week a year ago. The average U.S. on-highway price of diesel was $3.66 per gallon, up slightly from the prior week but 24 cents less than early February 2024.
- Trucking: Spot flatbed prices were mixed to start February – down in the Southeast and West – but higher elsewhere and averaging $2.46 per mile nationally, according to DAT Trendlines. Regionally, average spot prices per mile were: Southeast – $2.49, Midwest – $2.65, South – $2.36, Northeast – $2.44 and West – $2.21.
- Other costs: The USDA’s December index of prices paid for commodities and services, interest, taxes and farm wages were mixed. Machinery costs inched higher from November and were up 1.5% from December 2023. Fertilizer and total feed prices were up from November but dipped from December 2023.
On Jan. 29, the Federal Reserve held steady on interest rates at 4.25%-4.5%. USDA Farm Service Agency interest rates for farm operating loans (5.125%) were steady for February, while interest rates for direct ownership loans (5.5%) were lowered slightly.
