March 31, 2014 — The drought situation in California is “Pretty Scary,” according to Utah State Ag Economist Dillon Feuz. He’s heard that irrigation companies are telling forage and
other row crop growers that they may not have water. That makes it hard to say where hay prices are heading.
“$300 per ton is not out of line,” he said on DairyLine Radio. “If California stays this dry, that could be the impact.”
California is a big enough player that most of the hay that leaves Utah and Nevada is probably going into California, either directly to exports or into the dairy industry to supplant hay that’s leaving the Golden State.
Most of Arizona’s hay is under irrigation from the Colorado River.
“I don’t think they’re going to be as short as California, so there production should still be up,” he said. “But again, California is a big player in the hay market and if you drastically reduce one of the major players then you are going to have a shock that’s going to be felt across the western states.”
While hay producers may be fine with it, it could have an impact on many dairy producers in the west.
“Your benefit is sometimes your neighbors’ loss,” Feuz said. “Certainly they recognize if hay prices get too high and force dairies out of business, then they’ve just lost a major local buyer of their product.”