Some have been saying the drought has not had that much effect on California alfalfa production. Veteran hay marketing analyst Seth Hoyt disagrees.
Speaking at the Forage Seminar at World Ag Expo, Hoyt said the lack of surface water allocations led some producers to start cutting their 2014-crop alfalfa earlier than normal. That led to some of the largest gaps in pricing for premium and fair quality hay that Hoyt has seen in his career of analyzing the hay markets.
"We came into the season with less hay stocks," he said. "Then we had the drought situation in California and the West, but California was hurt the worst. The we also had from the Bureau of Reclamation a sero allocation for surface water in central California.
"So combine all those things and alfalfa growers started cutting for tonnage earlier than normal. Because of that, look what happened: The spread between the top and the bottom of the market, supreme and fair quality, widened to $110 to $115. I've never seen anything like it."
What the drought did was change the way hay is produced, and the market saw more of the low-quality hay being produced and not as much as the higher quality.
As a result of the drought, alfalfa yields were down 3 percent, while the U.S. was up 3 percent, Hoyt noted. "It was not only drought that caused some of these lower yields; it was also rain in some cases where the hay was left in the field too long. But California and Nevada were mainly a drought situation."
For more information on the hay market, visit http://www.thehoytreport.com/.