Hay prices remain steady as tariffs create export challenges

Hay exporters have expanded press capacity over the last decade to meet rising demand from Chinese markets, but tariffs now threaten this trade. Initially, international buyers stockpiled hay ahead of the tariffs, boosting Western prices and tightening supply. However, after the tariffs were announced, some export orders were canceled. China, which represented 30% of U.S. forage exports in 2024, has already reduced alfalfa purchases. Hay exports now face growing competition as international buyers seek alternative suppliers, echoing 2018–2019 when China sourced hay from other regions. While this shift temporarily pushed Middle Eastern buyers toward U.S. suppliers in 2018, the Middle East market today cannot fully replace lost Chinese sales. If tariffs continue to disrupt trade, Western exporters could face significant challenges.

Hay prices in the West have been stable, mostly aligning with last year, with some regions seeing $5–$10 per ton decreases. Sales have been stable but slow across western states.

Arizona - Arizona hay producers are currently on their second or third cutting, with strong demand from dairy buyers and exporters. Prices have increased by 5–7% compared to 2024, offering some relief to producers facing challenges from pest issues and April rain damage. Despite these setbacks, most of the crop is rated in good-to-excellent condition.

California - Hay trade in California remains steady, supported by strong domestic retail demand but limited export activity. The second cutting is underway in central California, though unseasonable April rains have caused some damage and appearance issues. Meanwhile, third cutting is in progress in the Imperial Valley, where hay is selling for $200 to $220 per ton. Despite some irrigation challenges, shipments and demand remain robust in the region.

Idaho, Oregon and Washington - Lower-quality retail hay prices are weakening as more supplies enter the market and producers clear space for new crops. Light export demand and increasing trade tensions are contributing to caution and uncertainty on the part of exporters. A recent major dairy herd liquidation in Washington led to the sales of old feed stocks, further contributing to excess supplies in the area.

Montana - Montana is facing worsening drought with 55.8% of the state in moderate drought or worse. Some producers are transitioning to hay barley, attracted by lower input and labor costs. High-quality alfalfa is selling for around $150 per ton, though sales remain slow. Regions with better water availability are more optimistic than those in dry conditions.

Profitability

March 12, 2025

Hay (Alfalfa): Slightly unprofitable - Neutral 12-month outlook
Hay (Timothy): Slightly profitable - Neutral 12-month outlook

Sluggish demand has kept alfalfa prices low. While potential improvements in milk prices and weather conditions could offer some relief, prices remain below breakeven levels.

Timothy producers will benefit from increased export demand.