The USDA’s March Planting Intentions report, which is based on grower surveys, is an early indicator of acreage trends that may have an impact on commodity markets.
This year’s hay report, released on March 31, indicates that hay acreage in California will show a 3 percent increase. That translates to 50,000 more acres of hay in 2005.
The 50,000-acre increase, however, is for "all hay" grown in California and doesn’t break out alfalfa. That report is released in late June when the USDA issues its Harvest Intentions report and separates alfalfa from other types of hay. In a recent CAFA News article by Seth Hoyt of the Agricultural Statistics Service, Hoyt noted that the guessing game centers around how much of the projected 50,000-acre increase will be alfalfa.
The consensus among industry observers appears to be that most of the acreage increase will be alfalfa. But they believe that it’s unlikely that an increase of around 5 percent more acres would negatively impact the alfalfa hay market in 2005. They predict that it would likely take at least a 10 percent increase in acreage to put a damper on the alfalfa hay market. Among reasons cited is the low inventory of hay stocks, as evidenced by record shipments into California, and record high prices earlier in the year.
More hay states
Of the seven western states, Nevada, Arizona and Utah join California in the plus column for increased hay acreage in 2005. All four states are showing a forecast for a 3 percent increase. That puts California at 1.6 million acres of all hay in 2005. While that figure is 50,000 acres higher than 2004, it’s 20,000 acres less than 2003.
Not surprisingly, the forecast for Oregon, Washington and Idaho is a 2 percent decline in acreage. All three states have had below normal rainfall and irrigation water will be tight.
As mentioned in an earlier CAFA column, Idaho is a state that bears watching when it comes to alfalfa acreage due to tight supplies of irrigation water. An agreement was struck with growers in early April to idle 100,000 acres of cropland to cope with Idaho’s drought conditions, Hoyt reported. The question is whether hay buyers there will become more aggressive in Nevada and Utah in order to meet the demands of Idaho’s rapidly growing dairy industry? Last year’s alfalfa acreage was 1,180,000, or 130,000 acres higher than in California. In terms of total production, however, California’s seven-ton per acre yield is three tons higher than Idaho’s yield average.
It’s not clear if alfalfa will be the crop that takes a major hit in Idaho. However, there’s speculation that potatoes and sugar beets will bear the brunt of the reduced acreage.
The USDA’s March 31 Planting Intentions report is available on the Web at, www.nass.usda.gov.