Alfalfa acreage expected to level off or drop this year

The strong 2001 hay market and a lack of alternative crops with profit potential left no doubt about which way alfalfa acreage was headed in California in 2002. The only question was how high? For 2003, industry sources are telling CAFA that they expect to see acreage remain steady or drop below last year's level.

Once the U.S. Farm Bill was passed by Congress last year, it stirred speculation about 2003 cotton acreage and its impact on alfalfa. With the cotton loan program in place, it was logical to assume cotton would rebound and alfalfa would take a hit in the San Joaquin Valley. Last summer a cotton industry source speculated that as much 50,000 acres of alfalfa would give way to cotton this year in the SJV. How that scenario eventually plays out will start to come into focus in late March when the USDA issues its Planting Intentions report.

At least one downward trend became evident last month with a report from the Imperial Valley that alfalfa acreage had dropped by 10 percent compared to January 2002. According to statistics compiled in mid-January of this year, there are about 18,000 fewer acres of alfalfa in the Imperial Valley. At the same time, wheat was up by nearly 15,000 acres vs. last year.

Information supplied to CAFA last year pointed to a strong early-season market for high-test hay, a forecast that proved to be on target. In mid-January of this year, however, caution appeared to be the byword for dairy hay buyers. The number of new crop alfalfa contracts and hay purchases in the low desert were lower than in previous years. It shouldn't come as a major surprise in view of low milk prices and predictions in some circles that a rebound may not occur for about six more months.

Some positive news

There is some positive news, however, when it comes to the growth of the dairy industry. Last year the number of dairy cows in California increased by about 5,000 per month. The increase came even though the number of dairy cows that were slaughtered was up by 11 percent in 2002 vs. 2001.

There were more statistics to ponder last month as the estimate of all hay stocks on hand was released in January. The total of all hay stocks in California, as of Dec. 1 of last year, was put at 2,235,000 tons. While that's a 14 percent increase from 2001, it's 60,000 tons below the five-year average of 2,295,000 tons. With hay utilization going up by 4 percent annually in the last two years, however, there's reason to believe that higher hay stocks may not be a major drag on the early-season alfalfa market.

Like last year there are bound to be surprises as the 2003 season plays out. In 2002, for example, the hay market didn't take the steep nosedive in summer that some experts expected in view of the big increase in alfalfa acreage. CAFA will update its members on acreage trends and other market developments when the USDA releases its March, Planting Intentions report.

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