When CAFA needs an expert to weigh in on the direction of the alfalfa hay market, it often turns to one of its own members, Seth Hoyt of the California Agricultural Statistics Service in Sacramento.
CAFA's January newsletter summarized his forecast for 2001 that indicated a “a strong first half of the year.” Through the first two months of this year he was right on target.
In early March, Hoyt told CAFA that alfalfa was one of the few bright spots in California's agricultural commodities markets and there were several reasons for optimism. “Bullish factors” include lower hay stocks in California and the West, and higher dairy cow and milk replacement heifer inventories. In January, 25 percent less alfalfa hay was trucked into California compared to 2000. Some Central California dairies were running low on inventories of milk cow quality alfalfa in early March.
The question on the minds of many California growers, of course, is how many acres of alfalfa hay will there be in 2001? Even for someone with Hoyt's experience and industry sources, it's a tough call due to dynamics such as water availability and high utility costs, just to name a few. “Growers have looked at crops that use less water,” he notes.
Not too long ago sources were forecasting higher cotton acreage in 2001. But, recent uncertainty over export markets, especially China, could mean that cotton acreage in the central and southern San Joaquin Valley could be about the same as last year.
However, several sources indicate that alfalfa acres in the northern San Joaquin and Sacramento Valleys may be about the same as 2000. One area where there's a good handle on a monthly basis is the Imperial Valley, he says. According to the Imperial Irrigation District, there were 178,000 acres of alfalfa hay in February, virtually the same as in 2000.
Perhaps the wild card in this year's alfalfa hay market is the northern mountain region. CAFA has been following the Klamath Water Users Association's (KWUA) efforts to stave off a pending crisis. The area is in the midst of a drought and the U.S. Fish and Wildlife Service and the National Marine Fisheries Service have made preliminary requests to vastly increase Klamath Lake levels and Klamath River flows to protect endangered species. According to KWUA, farmers and ranchers will be deprived of their water supply for 2001 if the plan is implemented.
While there is still a good deal of uncertainty, there is also some optimism for the long haul. If California's acreage is close to last year's, and there's no significant increase in hay from other states, a strong alfalfa hay market is possible throughout 2001, Hoyt believes. And he adds, “If summer grazing areas in the West experience another dry year, demand for feeder hay for beef cattle will probably be strong as it was last summer.”