Western hay markets become more local as freight costs climb

Western hay markets remain tight and increasingly localized as uneven supplies and high freight costs limit movement between regions. Alfalfa production across AgWest states was relatively flat, increasing just 0.7% from last year, but that masks considerable variation by state. Other hay production declined 1.2% across the territory, further tightening forage availability in several markets. Supplies of higher-quality hay are particularly tight after late-season rain damaged unprotected stacks and complicated final cuttings across parts of the West.

High freight costs have slowed hay movement and created a standoff between growers reluctant to lower asking prices and buyers unwilling to absorb higher delivered costs. Weekly U.S. diesel prices reached a record $6.53 per gallon on Sept. 21, with the impact even greater on the West Coast, where diesel peaked at $8.25 per gallon in California and $6.79 per gallon for the rest of the West Coast. As rising fuel costs pushed delivered hay prices higher, brokers saw shipments slow and buyers increasingly shifted to purchasing only immediate needs.

Conditions by state:

Arizona

Alfalfa production is down 5.9% year over year. Late-season storms disrupted harvest and damaged hay, supporting demand for higher-quality hay. Alfalfa prices are averaging about $40 per ton higher year over year, with markets seeing limited export demand as buyers resist higher costs.

California

Hay production is down 14.5% compared to the previous year, keeping supplies relatively tight. Retail prices have risen by $25 per ton over the past month, with demand strongest for higher-quality hay. There are limited prospects for increased hay supply for the remainder of the year as high freight costs continue to limit movement into the state.

Idaho

Supplies are stronger, with alfalfa production up 4.9% year over year and other hay up 12.2%. Prices for quality alfalfa have increased by more than $50 per ton year over year, leading to lighter dairy demand. Rains in October damaged exposed stacks, tightening supplies of export-quality hay.

Montana

Alfalfa production is up 5.2% year over year, while all other hay production declined 7.5% from the previous year. October precipitation supported late cuttings of dryland hay, but also extended grazing, reducing near-term hay demand. Higher freight costs and competition from Canadian and North Dakotan hay are keeping more supplies within local markets.

Oregon

Supplies are among the tightest in the region, with alfalfa down 16.4% from 2025 and all other hay down 13.4%. Rain damaged portions of later cuttings, further limiting higher-quality supplies.

Washington

Alfalfa production is up 7.1% year over year, but all other hay is down 6.0%. Columbia Basin alfalfa prices remain firm as supplies of quality hay tighten and improving Chinese demand has provided some support to exports. Buyers, however, are hesitant to buy at higher prices. Stronger alfalfa prices relative to timothy are also encouraging some growers to consider planting more alfalfa acres next year.

Profitability

Hay (alfalfa): Slightly profitable - Bullish 12-month outlook
Hay (timothy): Slightly profitable - Bullish 12-month outlook

Alfalfa profitability has improved as drought, reduced pasture availability, and stronger feed demand have lifted prices, and is expected to continue improving over the next 12 months. 

Timothy hay remains slightly profitable, although current export demand is weak. The outlook is cautiously bullish based on expectations for improving forage markets and eventual stabilization in export demand. However, uncertainty surrounding export buyers remains a significant risk.