Current Market Trends of Alfalfa Hay and Price Trend in 2024

The current market trends of alfalfa hay and its price trajectory for 2024 are shaped by various factors, including hay stocks and production, exports, and weather conditions in 2024. These elements influence supply, demand, and, ultimately, prices in the alfalfa hay market.

As of May 1, 2023, hay stocks were near-record lows, marking the third consecutive year of decline. The United States Department of Agriculture (USDA) forecasted a slight increase of about 1% in 2023/24 alfalfa hay production, with grass hay production up by 0.8%. This decline in hay stocks has disrupted the typical cyclical pattern of hay prices, which usually increase towards the year's end, peak in spring, and then decrease during the growing season. In 2022, the average price for all alfalfa hay increased from USD 211 per metric ton (mt) in January to USD 281/mt in October, exceeding the previous record-high average price of USD 227/mt established in May-14. In 2023, average prices for all hay peaked in April and have since been declining. Supreme and Premium quality alfalfa prices have also been lower than in 2022, recently averaging USD 288/mt. For most of 2023, Supreme and Premium quality hay sold for over USD 400/mt. Some Western states have experienced significant declines in hay prices, partly due to changes in hay exports.

Meanwhile, in Australia, the hay market is paused as the country transitions into early autumn, with domestic buyers assessing their needs until mid-year. Despite the delay, warm and dry temperatures in February have raised the possibility of an autumn feed drought. However, Feed Centra-Australia's Premiere buying and selling platform for quality hay and grain, reported the best quality hay in a decade, with higher sugars and hay bale weights, making 2024 the finest year for hay production in Eastern and Southern Australia.

Figure 1: Top Export Flows of Hay Globally

Source: Tridge

United States (US) hay exports in 2023 were 3.171 million metric tons (mmt), a 22% Year-over-Year (YoY) decrease from the 4.04 mmt exported in 2022. US alfalfa hay exports through Sep-23 dropped by 29% YoY from 2022. Despite the fall, China remained the leading destination for US alfalfa hay, with 774,104 mt delivered in 2023, compared to 2022. However, exports to Saudi Arabia (431,400 mt), and the United Arab Emirates (132,252 mt) have notably increased. This shift in the export landscape significantly impacts Western hay markets.

Predicting hay prices for 2024 is a multifaceted task influenced by various factors. These include the winter precipitation the US West Coast receives, the final hay stocks following the 2023 production season, and potential trucking issues that could hinder hay movement. Additionally, the prices of other commodities play a role, as hay prices typically align with competitive feed prices. Other influential factors are milk and beef prices, interest rates impacting production costs, the anticipated export rebound, and the weather conditions in 2024. For the US, China’s demand and economic recovery will influence the alfalfa hay market in 2024, aside from production levels. The price trend will hinge on how these factors unfold over the coming months.