Economic Tidbits

Make Hay While it Lasts

Nebraska hay and alfalfa production is often overlooked. It shouldn’t be. In 2021, Nebraska ranked second among states in alfalfa production, producing 3.73 million tons. And it ranked seventh in all other hay production with 2.56 million tons. Nebraska’s alfalfa and hay production are critical feedstuffs for Nebraska’s livestock sectors and a revenue source for forage producers.

Alfalfa and hay markets this year are being impacted by both drought and worldwide demand. U.S. alfalfa production is projected to be largely the same this year as last, but all other hay production is projected to be down nearly 5 percent. Production in Nebraska this year has been much more affected by drought. Alfalfa production is estimated to be 2.43 million tons, off 35 percent, while all other hay production is expected to be 2.4 million tons, off 6 percent. Fortunately, hay stocks this year were higher coming into the year. The Livestock Market Information Center reports hay stocks in Nebraska as of May 1 were 1.25 million tons, 25 percent greater than 2021.

According to Daily Livestock Report, the volume of U.S. alfalfa exports in the third quarter, 852,000 metric tons, were the highest on record, nearly 14 percent greater than last year. China, Japan, Saudi Arabia, South Korea, Taiwan, and United Arab Emirates were the largest purchasers. Of the total, China purchased almost 570,000 metric tons, its largest amount ever for a quarter. In contrast, other hay exports from the U.S. were down nearly 19 percent in the third quarter compared to last year.

Supply troubles and strong export demand have pushed prices for both alfalfa and hay higher (Figure 4). Price indices from the USDA show alfalfa prices in Nebraska are up 64 percent compared to Jan. 1, 2021, while all other hay prices are up 34 percent. For Nebraska producers, the price increases cut both ways. Nebraska’s livestock producers face higher costs. Alfalfa and hay producers benefit. The ultimate impact to the Nebraska agricultural economy remains to be seen.     

Figure 3. Alfalfa Hay Production (2021)


Figure 4. Nebraska Alfalfa and Hay Price Indices

Source: NEFB calculations based on USDA NASS data

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