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Drought gives one of the West's thirstiest crops an ironic boost

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Tay Wiles | Mar 25, 2014 08:00 AM

“We farmers here in the United States might as well recognize that we are a minority group, and that the prevailing interest of the nation as a whole is no longer agricultural,” wrote Dust Bowl farmer Caroline Henderson in a letter to a friend later published in the Atlantic Monthly in 1936. She lived in the eye of the eight-year drought, in the Oklahoma panhandle, and farmed wheat. She is now credited with creating one of the best written-records of Dust Bowl history. “Hay for the horses and the heifers remaining here cost us $3 per ton, brought by truck from eastern Oklahoma,” she wrote.

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Photograph by Flickr user Art Siegel.

That was a lot of money back then. Hay prices are much higher today – the national average is always over $100. But dire drought conditions in California have driven them way up in recent months, putting dairies and ranchers in a pinch similar to Henderson's. Many livestock producers in the corridor between Bakersfield, Calif., and Merced are buying hay that would normally be under $200 per ton, for as much as $325, and are looking to Pacific Northwest states and as far away as Texas and Colorado for competitive prices. Prices in California have risen by $50 per ton in just the past two months.

In similarly drought-stricken Nevada, where alfalfa accounts for 90 percent of the crops grown, hay producers are preparing for a difficult season for the third year in a row. Some counties’ water supplies are less than half of their normal size. Yet the dry conditions also have a silver lining: High prices have brought much-needed financial relief for producers, according to Jay Davison, an alternative crop specialist with the University of Nevada –even if they’re a nightmare for dairies and livestock producers in California.

“This has been a lifesaver,” he said. Since Nevada hay farmers have struggled with a weaker market in past years, many were in desperate need of improved prices, Davison said. And though alfalfa is a particularly water-intensive crop, the high prices incentivize farmers to grow as much of it as they can – long-term water supply be damned. 

Landon Dean, a hay and cattle producer in Western Colorado has a similar response to drought impacts. “The price of hay had been so low that it was at or below cost of putting up hay forever, so it’s nice to see it up,” she said. “We almost might break even this year.”

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The multi-year drought is hitting Western states, particularly California, hardest. Source: U.S. Drought Monitor.

Though the strong market may be a boon to hay farmers in the Pacific Northwest, Arizona, Nevada and Colorado, it’s still unclear whether there’s enough water to actually produce the crop in those places. Davison held a workshop in Fallon, Nev. last week to help local farmers prepare for another dry season. He and other agriculturalists will host similar discussions across the state over the next six weeks. Davison’s advice? “My recommendations are to irrigate normally until we run out of water,” he said. “Right now (forecasters are) predicting that by July 15 we’ll be completely out of water. Normally we go through October.” For Nevada hay farmers that’ll likely mean two cuttings instead of the normal four.

Drought isn't the only thing driving prices up; a thriving export market is helping. While Californians in need of feed for their livestock ship in hay from slightly less dry states, some hay producers that actually are managing to get a decent crop, are choosing to export their bales to China and elsewhere overseas. A steep uptick in demand for hay in the Middle East and Asia – because of growing cattle herds, increased milk consumption and not a lot of arable land outside urban areas where cows are located – have led to a 60 percent jump in U.S. exports of alfalfa and other types of hay since 2007.  Ten to 12 percent of Nevada’s hay is going to Korea, China and Arab nations.

Graphic from University of California Alfalfa & Forage News Blog, data from U.S. Department of Commerce. Click graphic for source.

The spike in hay prices should slow this year, analysts say, but not by much. “We’ll see whether or not we surpass 2011” in prices, said analyst Seth Hoyt, who’s based in central California. “We could set new record highs.” Katelyn McCullock at the Livestock Marketing Information Center in Denver, Colo., says that average prices nationwide should drop a bit in 2014, but the market in Western states will likely remain strong because the drought is hitting this region hardest. And unfortunately, forecasters predict drought in the American West will persist for months to come.

Tay Wiles is the online editor of High Country News. She tweets @taywiles.

Larry Bullock
Larry Bullock
Mar 28, 2014 09:55 PM
     How is it possible, economically, to feed livestock high-priced hay from the other side of the world?

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