UI Extension experts see improvement in local forage market

University of Idaho Extension experts have estimated the cost of producing a ton of alfalfa in Idaho ranged from $135 to $146 during 2016, and the average price for alfalfa should finish 2017 at about $144 per ton.

BLACKFOOT, Idaho — A severe winter has strengthened regional demand for alfalfa, but grower returns are still hovering around the cost of production, according to University of Idaho Extension experts.

Extension educator Reed Findlay, who oversees forage and horticulture in Bannock and Bingham counties, said the average Idaho price for a ton of alfalfa in 2016 was $114. Findlay predicts 2017 Idaho alfalfa prices will average $144 per ton.

“We’re seeing a lot better prices than we saw around Christmas time,” Findlay told hay growers March 16 during a UI forage school in Blackfoot. “There is movement in the hay markets, and they are better than we thought they’d be.”

However, Findlay said large hay inventories remain, and a strong dollar has constrained foreign alfalfa exports. Findlay believes recent flooding throughout Southern and Eastern Idaho will cut into hay yields and improve the local supply outlook. He anticipates the cool, moist conditions will also lead to problems with Phytophthora root rot.

“This may be a lower production year because of those two factors,” Findlay said. “In the next few weeks, we’ll find out more of what’s going on in the alfalfa fields.”

Blackfoot grower Dave Bingham said muddy field conditions have made it tough to access stacks and deliver hay, further boosting local demand. Lately, Bingham said local straw demand has been on the rise, as muddy conditions have increased the need for bedding during calving season.

Also during the forage school, UI Extension economist Ben Eborn publicized results of his Idaho alfalfa production cost study. Eborn estimated the average southeast Idaho grower spent $135 per ton to raise hay in 2016, down $2 from the prior year. Alfalfa growers in Magic Valley invested $146 per ton, down by a dollar.

His model farm in southeast Idaho had 1,250 acres of land and yielded 6 tons of alfalfa per acre. His Magic Valley model farm included 2,200 acres, producing 7 tons of alfalfa per acre.
Eborn attributes the slight decline in production costs largely to a 15 to 30 percent drop in fertilizer prices, a 10 to 20 percent drop in chemical prices and an 8 to 9 percent drop in fuel and repairs for machinery.

Eborn said fuel prices should remain fairly steady throughout 2017, and fertilizer market experts anticipate further price declines of 10 to 15 percent. Labor and irrigation costs should continue to rise, however.

He said his report is available at www.uidaho.edu/cals/idaho-agbiz as a tool for growers to assess their own progress.

“If you don’t know what your actual costs of production are than how do you know if you’re heading in the right direction with your cost structure?” Eborn said.

Eborn advises growers who must make cuts to start with their largest expenditures first, such as fertilizer and equipment. Growers who don’t shop around for fertilizer often miss out on the best prices, he said.

“I surveyed almost eight fertilizer companies, and you would be surprised at the differences in prices,” Eborn said.

During tough times, he believes growers should investigate options to lease equipment and free up capital.