The Livestock Marketing Information Center in Denver predicted Friday in a newsletter to Extension Agents called In The Cattle Markets that national alfalfa price would be above a year ago in 2021.
Other hay prices may weaken with normal yields, but the first part of the new marketing year supplies were expected to be tight.
The prediction came after the USDA’s National Agricultural Statistics Service released its data on 2020 US hay production last week in its Crop Production and Crop Production Annual Summary reports.
2019 HAY PRODUCTION DOWN
In short, total 2020 hay production was down 1.6% nationwide from 2019, with alfalfa hay production down 3.3% and other hay production down 0.3%. Drought persisted across much of the West in 2020, and states affected by drought had their production cut the most.
Dec. 1 hay stocks confirmed that hay inventories were tighter than a year ago. The Dec. 1 figure is an all hay measure, and showed total hay production was about 500,000 short tons smaller than 2019, or down about half a percent.
States across the West, northern High Plains and Northeast states showed smaller inventories in the Dec. 1 report. Nevada was the hardest hit state, dropping inventories 57% from a year ago.
New Mexico and New York also had substantially smaller inventories, the USDA said. Twenty-one states showed hay stocks below a year earlier.
Twenty-four states increased hay inventories, with Alabama leading the group on a percentage basis, up 64% from a year earlier.
On a total tonnage basis, Texas had the highest inventory, totaling 6.4 million short tons. Missouri was the second highest at 6.0 million short tons but showed significant decrease from last year, declining 900,000 tons in inventory.
That was the largest year-over-year decline of any state. New York was the second largest, dropping 600,000 short tons. New York’s levels hit a historically low value of 1 million short tons, the lowest in the state’s history dating back to 1973.
Nevada had the third largest decline, dropping 535,000 short tons, and similar to New York, is experiencing the tightest stock levels in 47 years. Nevada produces more alfalfa than other hay and experienced significant yield declines last year, down half a ton per acre.
SEEDINGS POINT TO LOWER 2021 PRODUCTION
New seedings of alfalfa indicated the lowest new seedings rate in 47 years, indicating acres are unlikely to increase in alfalfa. This is expected to support prices indefinitely, and may reach a level where livestock producers will be forced to substitute away in some regions.
The regional nature of hay prices and hay supplies will be highly impactful.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains last week at $109 to $111 per cwt on a live basis, steady to up $1 from the previous week. Dressed-basis trading last week was seen at $172 to $174 per cwt, down $2 to $3.
The USDA choice cutout Tuesday was up $2.33 per cwt at $229.06, while select was up $1.12 at $217.33. The choice/select spread widened to $11.73 from $10.52 with 96 loads of fabricated product and 35 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.21 to $1.27 a bushel over the Mar CBOT futures contract, which settled at $5.32 1/4 a bushel, up $0.20 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $134.96 per cwt, up $0.48. This compares with Tuesday’s Jan contract settlement of $135.65 per cwt, down $0.90 and Mar’s $141.47, down $2.37.