April 28, 2017
Alfalfa growers continue to grapple with where to cut production costs to offset continued low hay prices. Financially, it’s a tough row to hoe.
“2016 was a year that many alfalfa producers would probably like to forget,” says Steve Orloff, director and farm advisor with the University of California Cooperative Extension (UCCE) at Siskiyou County at Yreka in Northern California’s Intermountain Region.
“The last couple years have been dismal price wise for alfalfa producers.” And the first quarter of 2017 was more of the same.
Alfalfa prices have fallen, piggybacked by low milk prices. Most alfalfa hay is fed to livestock, mostly dairy cows, so dairymen operating near or below their production costs in recent years have reduced the amount of hay in rations. In turn, supply and demand has forced softer hay prices.
Growers have many belt-tightening options, as detailed in a survey conducted last year by Orloff and Dan Putnam, UCCE alfalfa and forage specialist. They quizzed alfalfa producers who attended past California and western alfalfa and forage symposiums via an electronic survey about the production changes they’ve made to trim costs.
The problem, Orloff concedes, is that in the long run some input reductions can cost more than the money saved.
“There is no ‘sure-fire’ universal recommendation on how to cut costs without reducing the overall profitability of alfalfa production. There are some areas where cutting back costs will reduce yield and reduce overall profitability. Growers should evaluate each input separately before proceeding.”
And the survey says
About 150 alfalfa and forage growers from California, Arizona, Utah, Idaho, Oregon, and Washington responded to the 12 question UCCE survey. Orloff shared the growers’ comments, and added his take on those, during the 2017 Arizona Alfalfa & Forage Symposium held in late March in Maricopa, co-sponsored by Western Farm Press.
The most common grower response to depressed prices (42 percent) was purchasing less equipment, for example tractors, balers, and swathers. This is a common first response when anyone looks to reduce their cost of living (a new car, furniture, etc.).
Orloff cautions that, when possible, alfalfa equipment should be purchased ‘as needed,’ especially during low crop price years.