Drought conditions are intensifying across the U.S., with roughly three-quarters of the country classified as drought or abnormally dry, tightening forage supplies. As of May 26, drought remains concentrated in the West and Southern Plains, with 51% of alfalfa acreage and nearly 60% of rangeland affected.
Hay prices have edged slightly higher across the West, supported by solid demand amid drought concerns. Alfalfa prices have improved since the start of the year, but rising fuel costs are adding pressure across the hay supply chain. Many operators have added fuel surcharges, increasing delivered hay costs for livestock producers and end users.
Conditions by state:
Arizona
Drought remains a concern in Arizona, with 96% of alfalfa acres in drought and of 75% pasture and range rated in poor or very poor condition as of June 1. Roughly 74% of the state’s cattle inventory is currently impacted by moderate or greater drought conditions. Prices have strengthened, with all grades averaging roughly $15 per ton higher year-to-date, supported by solid 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). Looking ahead, uncertainty around late-season hay availability is increasing as the Drought Irrigation Program begins, with some producers expected to limit additional irrigations and conserve water, potentially tightening supplies further and adding upward pressure on prices.
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, hay growers in the Imperial Valley were able to harvest first cutting more than a month earlier than normal due to dry winter conditions. Demand for the new crop has been stable, with high-quality hay prices approximately $10 per ton higher than a year ago.
Idaho
First cutting of new crop has been completed in southern and western Idaho. Hay demand in the state 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, 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 shape Montana’s forage outlook, with 61% of the state’s pastureland rated in poor to very poor condition as of June 1. Recent widespread rainfall brought more than two inches in many areas and provided some near-term relief, supporting seeded dryland hay crops. However, earlier drought impacts are expected to limit recovery in native grass hay, and conditions remain uneven across the state. Hay supplies have tightened, driving stronger demand and higher price expectations. Hay growers have reported increasing inquiries, with some anticipating sales in the $180–$200 per ton range for feeder quality hay. In some cases, bids have already exceeded those expectations, including reported offers of $200 per ton for new crop hay.
Oregon
First cutting has started in eastern Oregon, and other areas report good hay conditions. 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. Old crop movement has picked up as barns are cleared for the new crop.
Washington
First cutting has been completed in the Columbia Basin, with prices trending higher year over year. While overall sales activity has been limited so far, early reports suggest $210–$220 per ton for higher-quality hay. Weather conditions have been mixed, with a decent amount of rainfall across the region, though distribution has been highly variable. 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): 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.
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