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California Alfalfa & Forage Association

Over the last several months this column has passed along "best guess estimates" from industry observers trying to get a handle on California's alfalfa acreage in 2006. It has been a high interest topic fueled by a strong alfalfa hay market in 2004, followed by an even stronger and record setting market last year.

The much-anticipated June acreage report released by the National Ag Statistics Service (NASS), estimated a 6 percent increase for alfalfa, somewhat below initial projections made by many industry observers. At one time last year, we were hearing estimates that alfalfa acreage would be 10 percent or higher in California in 2006. While other industry sources were skeptical of a 10 percent jump, it would not have been a big surprise given the strong hay markets the last two years, and other factors that impact planting intentions.

In December, when the Central Valley was being hit by pounding rains, sources we talked to were predicting a maximum increase in alfalfa acreage of around 5 percent. One source in the northern San Joaquin Valley said he wouldn't be surprised if alfalfa acres in California staid about the same as last year.

If the NASS acreage estimate is on the mark, it means that there are 60,000 more acres of alfalfa in California, a sizeable increase, of course. On the other hand, the additional acreage may not have much of an impact this year due to several factors that have affected the 2006 hay market.

The higher acreage, however, is likely to be offset by lower production due to late spring rains that hampered Sacramento and San Joaquin Valley growers who had their hopes dashed of getting off to a good start. Given this year's poor start, it appears that high-test hay could be in short supply for most, if not all of 2006.

Low supplies of milk cow quality, high-test hay could get a boost if growers in other western states see an opportunity and begin shipping more alfalfa into California. In the July issue of CAFA News, however, Seth Hoyt of the NASS California Field Office reported that some California buyers who traveled to Nevada and Utah in June didn't find the volume of high test hay they were hoping to locate. He also noted that, "alfalfa hay shipments from February through May (of 2006) were 8 percent below the same period in 2005." While other factors may have played a role, it appears that the biggest factor is Arizona's drop in alfalfa shipments, which is linked to urban sprawl in the central part of the state, and a larger dairy industry that's buying more homegrown hay.

In December and early January when acreage estimates were being tossed around, we were getting mixed messages on how far milk prices were expected to fall. Opinions ranged from a minor drop to a significant decrease. In April and May the Overbase milk price in California was $10.20 per hundredweight, and according to Hoyt, "this could be as bad as the $9.50 price in 2003 considering the current higher cost of production."

While there are a number of factors that will still play out over the rest of the year, once again the constant in this year's market is the continuing need for high-test hay.

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