Forage Fodder

New-crop hay prices have generally strengthened across the West in 2026, with demand increasing in drought-affected regions as ranchers secure forage supplies ahead of fall and winter. Hay prices have risen by $20 per ton across many Western markets, despite weaker milk prices and reduced export demand. Tight carryover inventories, multi-decade-low alfalfa acreage, frost damage and water restrictions have all contributed to stronger prices. Weather conditions will remain a key factor influencing hay as harvest progresses. Export demand remains pressured. Through the first of the year, U.S. hay exports were down 8.2% from the previous year, a concerning trend given that 2025 marked the lowest annual export volume in 16 years. Alfalfa exports declined in every month of 2026, with the largest year-over-year decline occurring in March (24.4%) and June (20.4%). Ongoing geopolitical disruptions in the Middle East, coupled with a relatively strong U.S. dollar, have reduced the competitiveness of U.S. hay in international markets and are weighing on export demand.

At the same time, domestic demand has become increasingly uneven. Record milk production has pressured milk prices, pushing Class III milk futures below $17 per cwt at times and leaving many dairies operating hand-to-mouth. In contrast, hay demand from cattle producers has largely increased given concerns about growing drought conditions.

Conditions by state:

Arizona

Alfalfa prices for fair and good-quality hay have remained relatively steady. Hot weather during June and July created quality challenges in some production areas and could impact late-season supplies.

California

Alfalfa prices in Central California have improved by $20 per ton over the past several months for both premium and fair-quality hay. In the Imperial Valley, fair-quality hay has seen the largest price gains, while premium and supreme grades have remained relatively unchanged. Softening milk prices have left many dairies cautiously purchasing hay, while brokers sourcing hay from neighboring states are struggling to compete with local demand. Supplies of high-quality alfalfa remain tight, and reduction of hay acreage and elevated production costs have also encouraged growers to seek higher prices.

Idaho

Hay prices have strengthened significantly, with alfalfa values across most quality grades increasing roughly $40 per ton over the past 90 days. Frost damage and strong ranch demand have supported the market. As premiums for higher-quality hay have narrowed, some growers are prioritizing yield over quality by extending cutting intervals. Potential water curtailments remain a concern for the remainder of the growing season.

Montana

Hay markets largely reflect local needs. Drought-stricken areas continue to command stronger prices due to limited availability, while growers in regions with access to imported hay from Canada and the Dakotas face greater competition. Many growers report that much of their crop is already committed, though final prices have not yet been established. Timely rainfall has improved pasture and rangeland conditions in many areas, helping prevent more severe forage shortages.

Oregon

Drought conditions and wildfires have intensified in portions of Oregon, though harvest activity continues across much of the state. Eastern Oregon producers have largely completed first cutting. Demand for new-crop hay has been strong, with buyers already securing supplies directly from producers. Market participants continue to monitor drought impacts as the season progresses.

Washington

Alfalfa prices in the Columbia Basin have increased modestly, rising approximately $10 per ton since spring. However, weaker export demand has caused Columbia Basin prices to lag behind neighboring states. Reduced dairy demand has also played a role, as Washington's dairy herd has contracted notably over the past two years. Timothy hay quality has been reported as average, while prices remain elevated near year-ago levels. Because timothy acreage expanded this season, producers believe the larger crop could create downward pressure on prices later in the year.

Profitability

Hay (alfalfa): Slightly profitable - Bullish 12-month outlook
Hay (timothy): Slightly profitable - Neutral 12-month outlook

Tightening Western supplies and an expected reduction in hay production are helping rebalance the market, while increasing drought concerns are driving stronger domestic demand and improving alfalfa prices.

Sustained export demand, limited high-quality supply and steady forage demand are supporting timothy hay profitability despite higher production and logistics costs.