Western drought deepens, pressures 2026 hay outlook

As of May 4, approximately 46% of U.S. alfalfa hay acreage was experiencing drought conditions, underscoring persistent moisture deficits across key growing regions. These conditions are particularly evident in the West, where below-normal snowpack, warmer-than-average winter temperatures and limited spring precipitation continue to raise concerns about irrigation availability and forage production throughout the growing season.

U.S. hay export volumes declined in the first quarter of 2026, reflecting ongoing adjustments in global demand and logistics. National export volumes fell 7.9% year over year, though stronger prices limited the decline in export value to 4.7%. The outbreak of conflict in the Middle East further disrupted shipping, forcing hay to be rerouted or transloaded and driving up logistics costs. As a result, March shipments to the region plunged 52.3% from a year earlier. March’s export volumes to Saudi Arabia fell 45.5% month over month and shipments to the United Arab Emirates were down 23.9% from the previous month.

Regional trends varied, however, with some export channels showing signs of recovery. Exports through the Seattle and Columbia–Snake River terminals increased 5.3% compared to the first quarter of 2025, suggesting that exporters in the Pacific Northwest are beginning to right-size operations and regain market footing. In contrast, shipments through Southern California ports remained under pressure, with volumes down 25.4% year over year, reflecting ongoing pressure from weaker demand (this region is the primary hay exporter to the Middle East) and higher costs.

Hay prices have edged slightly higher across the West, supported by solid demand amid drought concerns. Alfalfa prices improved during the first quarter, but rising fuel costs are adding pressure across the hay supply chain. In Washington’s Kittitas County, diesel prices averaged $6.82 per gallon as of May 3 (a 60% year-over -ear increase) raising costs for fieldwork, transportation, and custom services. As a result, many operators have added fuel surcharges, increasing delivered hay costs for livestock producers and end users.

Conditions by state:

Arizona

Drought remains a dominant concern in Arizona, with 78% of pasture and range rated in poor or very poor condition as of May 4. Roughly 75% of the state’s cattle inventory is currently impacted by moderate or greater drought conditions. Alfalfa prices have strengthened in Arizona, with all grades averaging roughly $15 per ton higher year-to-date, supported by strong retail demand. Quality challenges in new‑crop hay have weighed on export demand, which has been further pressured by disruptions in the Middle East (a key export destination).

California

Weather challenges continue to shape California hay markets. In Northern California, persistent rainfall has delayed fieldwork and harvests, while wet conditions in the Central Valley have delayed cuttings, weighing on feed quality. In contrast, first cutting in the Imperial Valley began nearly a month early due to the dry winter. However, demand for the new crop has been stable with high-quality hay prices approximately $10 per ton higher than a year ago.

Idaho

Hay demand in Idaho remains steady, with most existing inventories largely sold out. Concerns surrounding drought and reduced irrigation allocations are beginning to intensify following the governor’s statewide drought emergency declaration. These conditions have increased early‑season interest from cattle producers looking to secure forage. Idaho hay prices have risen notably, with USDA reporting average hay prices up $15 per ton year over year in March and lower‑quality hay gaining $20 to $30 per ton. Tight remaining hay stocks and a rapidly expanding dairy herd continue to support prices.

Montana

Dry conditions continue to impact Montana’s forage outlook, with nearly half of the state’s pastureland rated in poor to very poor condition as of late April. As drought conditions intensify, available hay supplies have tightened, leading to improved demand and rising prices. While some areas received scattered precipitation in April, much of the state’s cattle inventory remains in drought-affected regions. Ranchers are increasingly concerned about summer grazing conditions and may need to rely more heavily on supplemental feeding. USDA data indicates average hay prices have reached $157 per ton in March, up 12.9% year over year.

Oregon

In southern Oregon, particularly in the Klamath Basin, ongoing dry conditions are beginning to influence acreage decisions. The Drought Response Agency is offering between $250 and $300 per acre for land idling, creating a financial incentive for producers to reduce planted acreage. As a result, total hay and grain production in the region is expected to decline, which could further tighten supply and support prices later in the season.

Washington

First cutting is underway in the Columbia Basin, with early reports indicating generally stable prices. However, demand signals are mixed. Export activity has been relatively slow, and dairy demand has softened compared to earlier periods. Feedlots are showing interest in purchasing hay, but primarily at lower price points, suggesting some price sensitivity remains in the market.

Profitability

Hay (alfalfa): Breakeven profitability - Neutral 12-month outlook
Hay (timothy): Breakeven profitability - Neutral 12-month outlook

Alfalfa hay markets are expected to operate near breakeven in 2026, as relatively stable but low prices are magnified by high production costs and continued softness in export demand.

Timothy hay markets are expected to operate near breakeven in 2026, as steady but limited demand is offset by elevated production expenses.

Missouri Direct Hay Report

USDA Hay Markets – May 12, 2026

Kansas Direct Hay Report

Dakota Hay Auction - Corsica, SD (Monday)

State-By-State Hay Markets

Colorado—In Apr. 23 report, compared to the last report, trade activity very light. Demand good to very good as drought persists across the state with water allocation shortages heavily impacting crop planning, with farmers not sure how many acres of corn they will be able to plant for silage and alfalfa growers expecting only enough water to cover 1-2 cuttings. Regions across the state are indicating insect damage due to the warm temps we had in March. The late freeze last week has also impacted plant health in some areas. The next available report will be May 7.

Missouri—In the Apr. 30 report, heavy rains and some severe weather over the last couple of weeks here in Missouri. As of the latest drought monitor, near 83 percent of the state is drought free. The SE corner, especially the boothill area, still of the most concern. Farmers have made decent progress planting over the last two weeks, but many low areas did end up underwater and some replanting will have to occur. Haying has started with some wheat, rye and such being wrapped. Weather hasn’t given enough consecutive days for much else but there is a touch of new crop alfalfa that has been baled. Thus far the market on new crop hay hasn’t really been tested. High fuel cost doesn’t really encourage for much trucking at this time either. Hay prices are steady. Demand is light and supplies are moderate. The Missouri Department of Agriculture has a hay directory at https://apps.mda.mo.gov/haydirectory or visit the University of Missouri Extension feed stuff finder at https://feedstufffinder.org.

Nebraska—In the Apr. 23 report, compared to the last report, Platte Valley and Central areas round bales of alfalfa and prairie grass hay sold steady to mostly $10 higher. Ground and delivered hay $5 to $10 higher. Alfalfa pellets sold steady to $10 higher. In the west, ground and delivered hay $30 higher and steady on the sun-cured alfalfa pellets. Contacts that still have hay said the phones have been busy. Very large areas of the state are extremely dry with several thousand acres burned. Hay supplies are limited in several areas, and some normal sellers have opted to not sell hay currently. Spring planting has started, per NASS as of Monday only 8% of the corn has been planted compared to 7% in 2025. Soybeans come in at 2% same as last year. Some hay producers have planted quite a few acres of alfalfa this spring. Knowing that forage production will be low due to lack of irrigation in the western side of the state.

 Oklahoma—In the Apr. 24 report, compared to the last report, Movement is slow to steady. Hay producers are still trying to navigate the weather, pests, and the drought.  Different parts of the state are in different phases in their hay production. Prices for new crop hay are still to be determined. It is still too early to tell what the new crop grass hay will be. Parts of the state have received some rain. Continued rain showers through the weekend with cooler temperatures in sight. Drought is steady at 100 percent of the state has some form of drought. The next report release will be on May 8.

Texas—In the May 1 report, compared to the last report, hay prices remain steady. The next available hay report will be May 15.

South Dakota— In the Apr. 10 report, compared to last report, Good demand for grass hay currently, light to moderate demand for alfalfa. Good interest from beef cattle operations looking to buy grass hay, not near the interest in buying alfalfa currently. Large dairy operations continue to feed haylage, which is keeping the alfalfa market under some pressure. Warmer temps and some rain in the forecast for the weekend and the start of next week. Good demand for cornstalks yet. 

Wyoming— In Apr. 15 report, compared to the last report, bales of alfalfa grass and pellets sold steady. Demand was good. Quite a few people calling and looking for hay to purchase. Hay contacts are sold out of 2025 hay and are waiting to start the new crop hay probably the last week in May if every works out correctly. Irrigation water is the big topic on the hay calls. Some areas will have normal amounts of water and other districts are limiting the amount of water and the days to use it.  Released on Monday, April 13, the state’s SNOTELs are reading 46% of median with a basin high of 88% and a basin low of 0%. Last year the state was at 91%, and at 97% in 2024. Lack of snow fall this year is what has put the halt on the irrigation water for this growing season. Hopefully good Ole Mother Nature will bring the rains to grow the grass, hay and replenish the water in lakes and reservoirs. Next report will the first part of June

Montana— In May 1 report, hay sold mostly steady to 5.00 higher. Hay supplies across the state continue to tighten and many producers are completely sold out of hay. Some producers are holding over some hay for personal use in case drought conditions worsen. Lower quality hay continues to see strong demand as ranchers search for hay to feed cows while they wait for there to be enough grass to turn out. Spring rain and snow showers were scattered across the state over the past two weeks but moisture varied greatly by location. Overall, much of the state remains dry and in some form of a drought. New crop contracts are starting to be written and demand for new crop hay is good to very good. Ranchers report they need more hay than last year as many are trying to grow their herds and will have more mouths to feed this winter. Asking prices are 170.00-180.00 from several producers across the state with some ranchers locking in these prices quickly. There is a major concern over how much hay will be produced this summer. Many irrigation districts have already announced they will have a very short irrigation season due to low river and stream flows. This, coupled with drought conditions will limit the volume of hay produced. According to the drought monitor 57.18% of the state is in Moderate drought or worse, up 0.14% from 2 weeks ago. 28.30% of the state is in an Severe drought or worse, unchanged from 2 weeks ago. 5.17% of the state is in Extreme drought or worse, up 3.27% from 2 weeks ago. 0% of the state is in Expectational drought, unchanged from 2 weeks ago. Notably, 94.28% of the state is abnormally dry, up 0.79% from 2 weeks ago.

Regional Hay Prices