National Hay Situation and Outlook

The 2014 calendar year provided favorable growing conditions for hay producers across most of the U.S. Even drought-struck California produced more hay than anticipated, according to the USDA-NASS reports. This has contributed to a general story in the national hay complex of trending towards normal (pre 2010 and 2011 drought) production, stock levels, and prices. Hay is a highly regionalized crop, and drought can have varying impacts depending on the region. The highest hay acreage is typically in the middle of the U.S. spanning a direct line from Texas up to North Dakota. However, these are not necessarily the highest producing states. Texas, California, Missouri, South Dakota and Kansas are the top five in average total hay production for the time period of 2004-2014. U.S. hay production in 2014 was the largest since 2010, and prices, although trending slightly lower throughout the marketing year, continued to be supported by an increasing disappearance level and lagging increase in harvested acres as the industry continues to work its way back to pre-2011 drought levels. The increasing disappearance can be attributed to first a growing national dairy herd in 2014, and second the growth of the national beef herd which is forecasted to continue into 2015. Over the past 20 years harvested acres of alfalfa has been on a decreasing trend, down 24% compared to 1994. Since 2012 however, there has been a reversal of this trend and harvested acres of alfalfa have gradually increased year-over-year. Compared to calendar year 2013, 2014 recorded a 4% increase in alfalfa acres harvested, putting the total number at 18 million acres – the highest level since 2011. Looking at the same time frame for harvested acres of other hay, in the past 20 years they followed an increasing trend line until 2002 where the peak was experienced at 41 million acres. Since 2002 harvested acres have stayed in a steady range of 39 million to 41 million acres, except during the drought in 2011. Year-over-year, 2014 posted a 4% decrease in harvested acres to 38 million. Production in 2014 According to USDA-NASS Annual Crop report, national alfalfa production increased 7% in 2014 compared to 2013 to sit at 62 million tons. This was the result of a 4% increase in national harvested acres and a 3% increase in national yield. As shown in Table 1, the top 5 alfalfa hay producing states in 2014 were California, South Dakota, Idaho, Wisconsin, and Montana. Notable changes in production took place in South Dakota and Wisconsin, up 16% and 44%, respectively, in terms of production. Surprisingly, even though California experienced one of its worst droughts in history during 2014, alfalfa production only decreased by 2% in that state.