Arizona hay supply could fall short of demand

The U-Haul truck rental facility located across the street from Lee Banning’s alfalfa hay business in Phoenix, Ariz., speaks volumes to the rapidly disappearing agricultural landscape in central Arizona. The greater Phoenix area is bursting at the seams where rural landscapes are now dotted with newly planted tile roof houses.

Due to the building bonanza, Banning estimated 50 percent of the farm ground in central Arizona has been converted from agricultural fields to new homes over the last five years. Another 10 percent to 15 percent is projected for loss. Far outlying areas are safe … for now.

Banning owns and operates Banning Farms, a 5,000-acre alfalfa hay operation with fields in Phoenix, Tolleson, and Gila Bend in Maricopa County. About half of Arizona’s alfalfa hay production is located in central Arizona, he said.

“Development is creating issues with harvesting hay in central Arizona. Now there are hayfields next to housing developments so you’re getting complaints about harvesting at night, farm equipment noise, and some occasional dust,” Banning said.

The complaints are laying the foundation for alfalfa hay acreage reductions, and a move toward consolidating smaller hay farms into larger operations.

“As you lose acres, can you continue to be profitable?” he queried. “You may see a consolidation of farm operations where some of the smaller guys slip out and are acquired by larger producers. Instead of the larger farms getting larger, maybe the operations can maintain their size or slow the decline of their overall operation size.”

The shift and reduction in alfalfa hay production is leading to the scenario where Arizona-grown supply cannot meet alfalfa hay demand.

Banning, a mover and shaker in Arizona’s alfalfa hay industry, is president of the Arizona Forage Producers Association. He has held the post since the group was formed about five years ago. The association has 150 to 250 producer and associate business members.

Banning Farms

Banning Farms is a fully integrated operation. “We grow it, we sell it, and we truck it,” Banning said. Most of his acreage is planted with the variety Mecca III, which Banning says produces a fine stem and leafy product desired by most of his customers.

Thirty to 40 percent of Banning’s 45,000 tons of annual production is sold to Arizona dairies. The balance is for horses, ranch-raised beef cows, or sold to feed stores.

About 300 to 500 tons a month is shipped eastward with Texas a major delivery destination. Banning hay deliveries also head northeastward to Maine. While he doesn’t ship hay to California, Banning has an operation in the Imperial Valley where he moves the hay into Arizona.

Banning began farming in 1976 with three acres of cotton. Acreage later was expanded to 8,000 acres, and once included 6,000 acres of Pima. In the early 1980s, Banning switched to mostly forage crops since his neighbors were dairy producers and needed quality hay.

Today crop rotation includes 300 to 600 acres in sorghum, barley, corn silage, and sorghum silage.

Despite the housing pressures on and near his alfalfa ground, Banning has an optimistic outlook for Arizona’s alfalfa hay industry.

Future of Arizona alfalfa hay

Demand is strong and prices are near all-time highs for premium alfalfa hay. Most Arizona production is located in Yuma, Parker, central Arizona, and even acreage in Snowflake.

Arizona has 150 to 250 alfalfa hay producers with the average farm size of 300 acres, Banning estimated.

“I believe (statewide) alfalfa hay demand will remain constant and possibly increase in Arizona. The dairies are relocating to the outer areas, consolidating but getting bigger. I don’t see any reduced demand for dairy feed,” Banning said.

“Corn silage, alfalfa hay, sorghum silage, oat hay, and other forage feeds will remain in great demand (for dairies), and possibly even better depending on local ethanol needs. The higher costs of grains may cause dairymen to feed more forage, and substitute vitamins, minerals, or protein products to get the feed rations in balance,” Banning said.

He doesn’t foresee a reduction of horse numbers since urban development is far away from ranches.

“I think we’ll continue to see strong prices for hay which we need because all of our production costs are up tremendously. The supply will continue to decline because of the loss of ground to development. That’s my vision for the next 10 years,” Banning said.

2007 alfalfa hay quality - The cool winter and spring in 2007 delayed crop maturation, reducing yields by 1 to 1 ¼ tons per acre. Alfalfa hay quality is currently as good or better than average, Banning said.

Pest issues - Pest pressures have been average with some weevil, aphid, and lygus populations. The early cool weather caused some additional nematode pressures.

“It remains to be seen how producers prepare and work for weed control – summer grasses and weeds – and how that will impact quality or average,” Banning said. He pointed to the soon to follow Arizona monsoon season which is annually a “double-edged sword” – delivering much needed rain but apt to damage hay.

Energy - Diesel fuel prices have doubled over the last three years. While diesel in years past was the third or fourth highest input cost in alfalfa hay production, it is probably the most expensive input now, Banning said.

“Alfalfa hay is a very high energy use crop from planting to harvest. Everything you do with alfalfa hay requires diesel,” he said. “We harvest alfalfa nine times a year so about every 25 to 30 days all equipment is running and burning fuel.”

Water - Banning, a member of several water boards, believes a water shortage declaration on the Colorado River could be announced in early 2008.

“I think a shortage will be declared on the Colorado River in eight to nine months,” Banning predicted. “Once that happens, uses and deliveries will be cut. That would also cut hydropower and we’d have higher (energy) costs as well. Whether it’s surface water or energy to pump groundwater, our inputs will rise.”

“In the Salt River Project Irrigation District I spend about $18 per acre-foot once we get out of surface water and into groundwater. On our desert farm in Gila Bend, we’re spending $37 per acre-foot for groundwater,” he said. “At $37, we’re covering energy and labor costs to produce the water but not building any reserves for well repairs or future expenses.”

Most of Banning’s hay acreage receives pump water. The water table is dropping about 3 to 5 feet annually in the central Arizona area. Lowering pump wells translates into reduced efficiencies.

If a river shortage is declared, California water use would fall as well, he said. “California wouldn’t be able to supply the hay shortage needs in Arizona. A shortage would have a dramatic impact on the entire Southwest.”

Farm labor - While farm labor shortages are reported nationwide, insufficient labor continues to impact the alfalfa industry.

“Whether legal or illegal labor, insufficient labor is available to meet job needs,” Banning said. He basically supports the immigration reform legislation before Congress, but with a guestworker program instead of downright amnesty.

“A guestworker program is sufficient. Yes, they’d like to have amnesty or citizenship, but I think they’d be satisfied with a guestworker program to be here legally.”

Banning employs 35 to 50 employees with half on the payroll for about 15 years.

“The feds (Congress) need to step up to the plate, shut the doors and turn off the phones, and do what’s right for this country,” Banning said.

Roundup Ready alfalfa - While a court decision has Roundup Ready alfalfa planting on hold in the U.S., Banning said almost all Arizona plantings are conventional varieties.

“I’ve heard there’s some Roundup Ready alfalfa in Arizona but I don’t know where it is. For Arizona, Roundup Ready alfalfa is a non-news event,” Banning said.

“There is a huge amount of available herbicides and pesticides to control weeds and grasses in alfalfa. I don’t think Roundup Ready alfalfa is a cost efficient or effective way to control grasses and weeds. It’s too high priced.”

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