Foraging for Higher Prices: International Demand Is Changing the US Hay Market
As the global demand for forage escalates, western producers of alfalfa and other hay will benefit while western dairies will need to adapt.
The western seven (W7) states—Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington—are responsible for 18% of total U.S. hay production and an estimated 90% of US hay exports. Lower milk prices through 2015 and 2016, coupled with weather-related forage quality issues, caused hay stocks to build and put downward pressure on hay prices. However, the top six importers (I6, consisting of China/Hong Kong, Taiwan, South Korea, the United Arab Emirates, and Saudi Arabia), responsible for buying over 95% of US hay exports, are increasing their import volumes and paying a premium for higher-quality hay, supporting prices at their current levels. As global markets continue to demand high-quality forage, US dairy producers will have to either pay more for hay, or use alternative feed sources and supplements, unless the downward trend in US hay production reverses itself.
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James WilliamsonAnalyst - Dairy Read more
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