Hay demand across the West has been notably sluggish, driven by a combination of factors. Weak export activity, reduced dairy demand and a significant tightening of cattle herds have all contributed to the slowdown. With fewer cattle to feed, the overall need for hay has declined. While La Niña conditions are expected to bring a colder winter to the Pacific Northwest and Montana, potentially increasing hay demand, the current surplus of hay supplies is likely to keep prices lower in the near term.
Adding to this dynamic, many cattle ranchers and dairies, despite benefiting from higher cattle and crossbreed dairy prices, remain cautious with hay and feed expenses. Instead, they are prioritizing cost-saving measures by keeping their herds on pasture for as long as possible. This frugal approach further suppresses hay demand, as producers focus on grazing rather than purchasing supplemental feed. As a result, the hay market continues to face downward pressure, with prices in many cases $5 to $10 below last year’s already low levels, even as winter approaches.
While data has been delayed due to the government shutdown, the most recent available estimates indicate that total U.S. hay production fell by 2% compared to last year. However, in AgWest states, total hay production increased 1.1% year over year, for a total of 21.47 million tons. Alfalfa production saw a more significant boost, increasing by 4.4% compared to 2024.
Montana experienced the largest increase in alfalfa production, with a 19% rise from the previous year. This growth was largely driven by improved conditions and reduced drought impacts, which led to an 11.6% increase in yields. Despite difficulties from monsoon conditions, which affected hay quality and created other challenges, Arizona also saw production gains. Improvement in average annual yields resulted in a 5% increase in alfalfa production in 2025 compared to the prior year. In contrast, Oregon experienced a reduction in yields from 2024 to 2025 due to severe rainfall. Impacts included quality issues and delayed cuttings.
Markets by state
Arizona – Despite a larger crop and production challenges, prices for premium and good-quality alfalfa have improved compared to last year. Negotiations over the Colorado River water allocation are ongoing, with a November 11 deadline looming. At the time of writing, it appears this deadline will not be met, which could prompt federal intervention. If the current agreement remains in place, Arizona will face an 18% mandatory cut to its water allocation due to low reservoir levels.
California – Sales to dairies and feedlots have been steady, but prices have remained flat. California experienced a much wetter October this year, with heavy early-season rainfall impacting some areas.
Idaho – Demand for hay has been slow, although the quality of hay was better than expected this year.
Montana – October rainfall impacted third cutting and has kept pastures green, allowing many ranchers to keep cattle on pasture longer and delay hay purchases. As a result, hay sales have been slow, with most activity occurring in counties still suffering from drought. August and September storms also disrupted harvests, lowering hay quality in some areas and further increasing grain hay supplies.
Oregon – Demand for hay in Oregon has been slow. Severe rainfall earlier in the season impacted yields and created quality issues. Late summer and fall rains further delayed cuttings and affected hay quality.
Washington – In Washington’s lower Columbia Basin, trade remains slow with very light demand. Some producers were able to complete a fifth cutting this season, adding to the available supply. Crop quality in the lower basin was average, with test results varying widely. Yields, however, were solid across the board, with many growers averaging over 9 tons per acre. Payment delays have been reported, adding financial strain to producers.
Profitability
Hay (Alfalfa): Breakeven profitability - Neutral 12-month outlook
Hay (Timothy): Slightly profitabile - Neutral 12-month outlook
Lower hay prices, driven by higher production, weaker demand, and cheaper feed alternatives, continue to challenge grower profitability. However, there is growing optimism that prices have bottomed out and may rebound in the coming year.
Increasing exporter interest in timothy hay could boost grower profitability.
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